Fed supervisors are pressuring banks, including BNY Mellon (BK) and JPMorgan (JPM), to reduce...


Fed supervisors are pressuring banks, including BNY Mellon (BK) and JPMorgan (JPM), to reduce their exposure to the $1.7T market for triparty repos. The obscure credit market is where many large firms get funding for their trading businesses, and there has been informal discussion about labeling it systemically important and bolstering oversight.

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  • Kurt Kendis
    , contributor
    Comments (47) | Send Message
     
    This is an old issue, and an enormous potential Black Swan originally and extensively documented by Darrell Duffie and Antoine Martin almost three years ago. If I recall, even the credit documents are not perfected and the netting does not always match for these massive exposures. The real question is "Why does it take the regulators so long to act?" when the evidence is clear. Reference= “Strengthening the Tri-Party Repo System,”
    Authors: Darrell Duffie, Stanford University &
    Antoine Martin, Federal Reserve Bank of New York
    4 May 2012, 09:20 AM Reply Like
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