SFS: Macroeconomics, tech, and alternate solutions take centre stage
10 May 2024 US
Image: Andrew Davis
From the buy side there is a lot of liquidity in the market, and, as always, cash is king. So said the panel at this year’s Securities Finance Symposium in Boston, when discussing the repo market outlook and sharing their thoughts on its current state.
“We all hope the interest rate curve normalises,” said Curtis Murphy, vice president, portfolio manager, global fixed income team, of State Street Global Advisors, touching on a subject that underpinned much of the discussion.
Staying with macroeconomics, Glenn Havlicek, CEO and co-founder of GLMX, asked another question that arose throughout the panel — given geopolitical turmoil, interest rates and the national deficit (particularly in the US), is an inflation target of two per cent still a realistic expectation?
When looking at repo, the market is liquid, according to Travis Keltner, head of secured financing, State Street, though he does believe it to be more “fragile” year-on-year (YoY). He puts across a positive view however, one that is mirrored by many in the panel as the discussion continues — in times of risk and uncertainty, opportunity is often also abound.
Bonita Blaney, vice president of Securities Finance and Collateral Management at Broadridge, highlights another trend she is seeing from her clients — demand for automation is increasing. No surprise as firms try to process increasing volumes.
Clearing also came up as an important topic of discussion — both in its current state, and asking if there are any possible alternatives given the upcoming Securities and Exchange Commission (SEC) clearing requirements. In answer to the latter question, Travis succinctly sums up his opinion: “You are never going to replace the liquidity of, and demand for clearing.”
With the possibility that some alternative solutions may be exempt, or not covered by, clearing regulation, the panel agreed that all areas should be explored. “There are a lot of ways to skin a cat,” noted Havlicek.
Ending with the slightly ominous question — what is keeping you up at night? — another hot topic received a notable mention: cybersecurity.
With a number of high-profile cybersecurity breaches in recent years, the panel highlighted the importance of this as a key concern for the industry.
In the classic tech conundrum, the power to fight hacking needs to stay one step ahead of the ever growing landscape and ingenuity of those on the other side. As one member of the panel noted with some humour, when a teenager decides to put down their computer console and hack you, you better be ready.
“We all hope the interest rate curve normalises,” said Curtis Murphy, vice president, portfolio manager, global fixed income team, of State Street Global Advisors, touching on a subject that underpinned much of the discussion.
Staying with macroeconomics, Glenn Havlicek, CEO and co-founder of GLMX, asked another question that arose throughout the panel — given geopolitical turmoil, interest rates and the national deficit (particularly in the US), is an inflation target of two per cent still a realistic expectation?
When looking at repo, the market is liquid, according to Travis Keltner, head of secured financing, State Street, though he does believe it to be more “fragile” year-on-year (YoY). He puts across a positive view however, one that is mirrored by many in the panel as the discussion continues — in times of risk and uncertainty, opportunity is often also abound.
Bonita Blaney, vice president of Securities Finance and Collateral Management at Broadridge, highlights another trend she is seeing from her clients — demand for automation is increasing. No surprise as firms try to process increasing volumes.
Clearing also came up as an important topic of discussion — both in its current state, and asking if there are any possible alternatives given the upcoming Securities and Exchange Commission (SEC) clearing requirements. In answer to the latter question, Travis succinctly sums up his opinion: “You are never going to replace the liquidity of, and demand for clearing.”
With the possibility that some alternative solutions may be exempt, or not covered by, clearing regulation, the panel agreed that all areas should be explored. “There are a lot of ways to skin a cat,” noted Havlicek.
Ending with the slightly ominous question — what is keeping you up at night? — another hot topic received a notable mention: cybersecurity.
With a number of high-profile cybersecurity breaches in recent years, the panel highlighted the importance of this as a key concern for the industry.
In the classic tech conundrum, the power to fight hacking needs to stay one step ahead of the ever growing landscape and ingenuity of those on the other side. As one member of the panel noted with some humour, when a teenager decides to put down their computer console and hack you, you better be ready.
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