Euromoney interview with IMF Economist Manmohan Singh on repo, re-hypothecation, collateral chains, and more | Securities Finance Monitor

by peterjukes

Regulatory proposals, such as the Dodd-Frank Act and Basel III, that are pushing riskier activities outside the banking system, will likely increase the shadow banking world; thus its linkages to the traditional banking world warrants closer attention. More generally, the approach towards shadow-banking system may need some adaptation in key dimensions. Dynamic chains, for example, are quite different from the credit intermediation chains.” In other words, the unintended consequence of the regulations will be to push activity outside of the traditional banks (and often the regulator’s grasp), so it might be a good idea to pay attention to where the business is moving.

via Euromoney interview with IMF Economist Manmohan Singh on repo, re-hypothecation, collateral chains, and more | Securities Finance Monitor.

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