| Description |
1 online resource (30 pages) |
| Series |
IMF working paper ; WP/17/113 |
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IMF working paper ; WP/17/113.
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| Contents |
Cover; Contents; Abstract; I. Introduction; II. The Pledged Collateral Market; A. Pledged Collateral and the Discomfort with "Collateral Chains"; B. Sources and Users of Pledged Collateral; III. Quantitative Easing (QE) and Regulations; IV. Evidence From SEC-Lending, Derivatives, and Prime-Brokerage Markets; A. Securities Lending; B. Derivative Markets Use of Collateral; C. Prime Brokerage; D. Summary; V. Collateral Reuse and Balance Sheet Constraints; VI. Conclusion; Tables; 1. Sources of Pledged Collateral, Volume of Market, and Velocity; 2. Securities Lending (2007-2015) |
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3. Risk After Enforcement of Netting Agreements in OTC DerivativesFigures; 1. The Sources and Users of Collateral (2007, 2010-2015); 2. Bilateral Pledged Collateral Flows-via the Key Banks in this Market; 3. The Collateral Map-QE and Regulatory Changes; 4. Equity Long/Short Hedge Position; 5. By-Passing the Plumbing-An Example of a QE Unwind; Boxes; 1. The 10-15 Banks at the Core of Global Financial Plumbing; 2. The Global Bilateral Collateral Market; References; Annexes; I. Rehypothecation and the Lehman Episode; II. Methodology for Calculating the Velocity of Collateral |
| Summary |
Transactions on wholesale capital markets are often secured by marketable collateral. However, collateral needs balance sheet space to move within the financial system. Certain new regulations that constrain private sector bank balance sheets may have the effect of impeding collateral flows. This may have important consequences for monetary policy transmission, for short term money market functioning, and for market liquidity. In this context (and in contrast to the literature, which has focused mainly on the repo market), this paper analyzes securities-lending, derivatives, and prime-brokerage markets as suppliers of collateral. It highlights the incentives created by new regulations for different suppliers of collateral. Moreover, it argues that the central banks should be mindful of the effect of their actions on the ability of markets to intermediate collateral |
| Notes |
Print version record |
| Subject |
Capital market.
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BUSINESS & ECONOMICS -- Finance.
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Capital market
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Corporation And Securities Law.
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Other Depository Institutions.
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International Monetary Arrangements And Institutions.
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Government Policy And Regulation.
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All Countries.
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| Form |
Electronic book
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| ISBN |
9781475599398 |
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1475599390 |
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