Financial journalists have a difficult job. This is particularly true when they are commenting on markets. These are complex, subtle and dynamic systems which journalists have to observe from the outside. Their problems are usually compounded by lack any direct experience of markets and a paucity of professional or academic literature to consult. If journalists…
Tag: securities financing transactions
How much does repo encumber collateral?
The issue The encumbrance of banks’ assets has become an issue of growing concern to regulators. Banks have increasingly resorted to secured funding in the wake of the financial crisis and as unsecured funding has become more expensive and generally scarce, while investors have increasingly preferred secured assets in order to mitigate heightened counterparty credit…