Category: Repurchase Agreements (Repos)

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Treasury Department Proposes a New Rule for Data Collection of Centrally Cleared Repo Transactions

Last month, on July 10, 2018, the Office of Financial Research (“OFR”), an agency of the U.S. Department of the Treasury, proposed a new rule that would require collection of data with respect to centrally cleared repurchase agreement transactions (“repos”) (the “Proposed Rule”).  The proposal stems from a multi-year effort by the Financial Stability Oversight … Continue Reading

The Fed’s Repo Rates Are Here

On April 3, 2018 the Federal Reserve Bank of New York (“Fed”) started publishing its three repo rates: the Secured Overnight Financing Rate (SOFR), the Broad General Collateral Rate (BGCR) and the Tri-Party General Collateral Rate (TGCR). For an overview of differences between the composition of each of the rates please refer to our prior … Continue Reading

Buy Side Overview of Fed Reserve Rule Restricting Certain Contractual Default Rights Under Repo, Securities Lending and Derivative Contracts

The Board of Governors of the Federal Reserve System (Fed Reserve) recently issued a final rule entitled “Restrictions on Qualified Financial Contracts of Systemically Important U.S. Banking Organizations and U.S. Operations of Systemically Important Foreign Banking Organizations; Revisions to the Definition of Qualifying Master Netting Agreement and Related Definitions” (hereafter the “Final Rule” and available … Continue Reading

Tri-Party Repo Data: Summary for April 2017 to August 2017

The Federal Reserve Bank of New York (FRBNY) continues to track and release monthly statistics of the U.S. tri-party repo market.  This post concerns the April 2017 through August 2017 statistics (the “Five-Month Period”). In March 2017, the FRBNY discontinued publishing the PDF and excel files containing single month statistics to which we have ordinarily … Continue Reading

A Look At the Quarter-End Repo Market

Recently the Liberty Street Economics blog on the Federal Reserve Bank of New York’s website published a post entitled: “Regulatory Incentives and Quarter-End Dynamics in the Repo Market.”  The post explores the quarter-end repo dynamics of the U.S. repo market for U.S. Treasury securities and primarily focuses on the impact that the leverage ratio has … Continue Reading

Fed Reserve Requests Comments on Proposed Repo Rates

On August 22, 2017 the Board of Governors of the Federal Reserve System (“Fed”) issued a notice and request for comment (the “Notice”) with respect to the proposed publication by the Federal Reserve Bank of New York (“FRBNY”) of three overnight repurchase agreement rates on U.S. Treasury securities.  The Notice states that publication of the … Continue Reading

Bankruptcy Court Affirms Auction Process Used Following Repo Counterparty Insolvency

In a remaining vestige of the financial crisis, the U.S. Bankruptcy Court for the District of Delaware (“Court”) recently issued an opinion upholding a repo counterparty’s sale of collateral following the insolvency of the counterparty to the repo. The Chapter 7 Trustee for the insolvent counterparty had challenged the sale on the basis that the … Continue Reading

Tri-Party Repo Data: March 2017

The Federal Reserve Bank of New York (FRBNY) released their monthly statistics of the U.S. tri-party repo market for March 2017. Beginning with the March 2017 data, the FRBNY will no longer publish the PDF and excel files containing single month statistics to which we ordinarily provide a hyperlink. Instead, tri-party repo statistics will only … Continue Reading

Defending Bankruptcy Exemptions for Repos and Sec Lending

One great thing about a new Congress is that bills pending at the end of the prior Congress must be reintroduced. This wipes the slate clean of problematic proposals and reduces the risk of something slipping through without sufficient debate. For example, the proposed Bankruptcy Fairness Act of 2016 (BFA) expired with the 114th Congress. … Continue Reading

More on Proposed Repo Benchmark Rates

In a previous post we summarized the FRBNY’s announcement that it was considering publishing three benchmark repo rates.  Recently the Liberty Street Economics blog (available on the FRBNY’s website) explored the goals of the proposed benchmarks as well as how each benchmark would have performed over the period from August 2014 to October 2016. Highlights … Continue Reading

Expanded MMF Eligibility Criteria for FRBNY Repo Progam

Effective September 2, 2016, the Federal Reserve Bank of New York (FRBNY) revised the reverse repurchase transaction (RRP) counterparty eligibility criteria with respect to money market funds (MMFs).  The revisions expand the set of potential RRP counterparties.  The FRBNY expects the number of RRP counterparties to be 150 as a result of the revisions.… Continue Reading

Federal Reserve Board Governor Tarullo Suggests “Outright Prohibition” as Possibility for “Shadow Banking” Regulation

In a speech delivered on July 12, 2016 to the Center for American Progress and Americans for Financial Reform Conference, Governor Daniel K. Tarullo discussed potential new approaches for the regulation of shadow banking (which he in part describes as “runnable funding”).  Specifically, in asking what form such regulation may take, Governor Tarullo indicated that a … Continue Reading