Industry welcomes Fed reform proposals
17 August 2010 New York
Image: Shutterstock
The New York Fed has said the industry response to its proposals to reform the repo market has been positive.
Comments have been solicited on the recommendations of the Tri-Party Repo Market Task Force. The Fed said the comments "strongly supported the Task Force's recommendations that address weakness in the US tri-party repo market and contribute to broader financial market resiliency".
There was support, said the Fed, for the introduction of three-way, real-time trade confirmation, as well as shifting settlement times and automating collateral substitution. Comments also supported the elimination of clearing banks' daily unwinding of positions.
There were some areas of concern, however. Some respondents suggested that the implementation timetable would not be appropriate, and that the new proposals may squeeze out some of the smaller cash lenders.
Comments have been solicited on the recommendations of the Tri-Party Repo Market Task Force. The Fed said the comments "strongly supported the Task Force's recommendations that address weakness in the US tri-party repo market and contribute to broader financial market resiliency".
There was support, said the Fed, for the introduction of three-way, real-time trade confirmation, as well as shifting settlement times and automating collateral substitution. Comments also supported the elimination of clearing banks' daily unwinding of positions.
There were some areas of concern, however. Some respondents suggested that the implementation timetable would not be appropriate, and that the new proposals may squeeze out some of the smaller cash lenders.
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