Fundplat > Schweiz > Spotlights > Regulators need to rethink leverage ratio for repo markets

Regulators need to rethink leverage ratio for repo markets

If balance sheet restraints prevent banks from providing repo liquidity, but asset managers are labelled «shadow bankers» for peer-to-peer repo - what do regulators want? Roelof van der Struik, manager for Treasury Trading & Commodities at pension fund manager, PGGM sees a backstop to accessing central bank liquidity as one option. Andy Hill, senior director at the International Capital Market Association (ICMA) says that members’ proposals may not be acceptable - disintermediation will not work but they are hamstrung by their regulatory obligations to retain capital against their trading activity. He argues there is a case for recalibrating some of these obligations, notable the leverage ratio as part of the Basel III Capital rules. - 8. Januar 2020


Spotlights