Securities lending on FSB radar
02 September 2011 Basel
Image: Shutterstock
The Financial Stability Board (FSB) has approved recommendations by its Shadow Banking Task Force. Among them, the regulation of activities related to securities lending and repos, including possible measures on margins and haircuts.
The supranational regulator will dedicate a specific "workstream" to focus on the securities lending and repo market, which will begin developing preliminary work plans and is expected to make policy recommendations by the end of 2012.
The FSB defines the "shadow banking system", which some industry participants call market-based financing, as "credit intermediation involving entities and activities outside the regular banking system" and acknowledges that its advantages include the provision of an alternative source of funding and liquidity to market participants and corporates.
The supranational regulator will dedicate a specific "workstream" to focus on the securities lending and repo market, which will begin developing preliminary work plans and is expected to make policy recommendations by the end of 2012.
The FSB defines the "shadow banking system", which some industry participants call market-based financing, as "credit intermediation involving entities and activities outside the regular banking system" and acknowledges that its advantages include the provision of an alternative source of funding and liquidity to market participants and corporates.
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