Global banking regulators are sounding the alarm that trillions of dollars’ worth of short-term loans could complicate their efforts to handle a failing financial institution, said people familiar with the talks.

The regulators are calling for changes to repurchase agreements (repos), and securities-lending agreements, the people familiar said.

The plan is regulators’ latest bid to end so-called “too-big-to-fail” firms, which are so interconnected that regulators believe their demise risks bringing the entire financial system to its knees. In a bid to prevent a replay of 2008, when Lehman Brothers Holdings Inc. failed after running out of appropriate collateral for repo loans, regulators have made separate changes to the workings of the repo markets.

See the full article here

Categories: Financial Markets

WP to LinkedIn Auto Publish Powered By : XYZScripts.com