Repo Traders Face FSB Collateral Rule in Shadow Bank Push
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Traders are facing new global rules on how they determine the value of collateral in repo transactions as regulators seek to prevent panic writedowns that are seen fueling future financial crises.
The Financial Stability Board, a global group that brings together central bankers and government officials from the Group of 20 nations, today published a set of guidelines on discounts applied to collateral handed over as part of repurchase-agreement trades and other securities-financing transactions that aren’t processed through clearing houses. It also set minimum standards for some types of trades.