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FSB reports on rehypothecation of client assets and collateral reuse

01/01/2017

On 25 January 2017, the Financial Stability Board (FSB) has published two reports which form part of the its work to transform shadow banking into resilient market-based finance.

On 25 January 2017, the Financial Stability Board (FSB) has published two reports which form part of the its work to transform shadow banking into resilient market-based finance. They are:

  • Re-hypothecation and collateral re- use: potential financial issues and regulatory approaches. In this report, the FSB describes potential financial stability issues and explains the evolution of market practices and current regulatory approaches to the re-hypothecation of client assets and collateral re-use. It also examines the possible harmonisation of regulatory approaches to the re-hypothecation of client assets and any residual financial stability risks associated with collateral re-use.
  • Non-cash collateral re-use: measure and metrics . In this report, the FSB sets out the finalized measure and metrics of non-cash collateral re-use in securities financing transactions (SFTs), which authorities will monitor for financial stability purposes.
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