BoE eyes action on 'complex' securities
Monday 23 May 2011 - by Andrew Hickley
The Bank of England has called for worldwide regulators to exercise their powers to restructure securities that are too "complex".
This would help securities supervisors ensure financial stability in the markets, he argued.
In a speech outlining a raft of possible directions for securities regulators, Tucker recommended that trade repositories also record closer detail into the use of collateral in securities trades.
This would help "lift the veil" of a "vital financing market", and would likely need to be done on the collateral swap market more generally, he said.
Tucker also called for requirements over reporting transactions for trade repositories to be given more worldwide attention in order to help regulators see where risks may be emanating from.
"We need to think about the purposes for which the information in TRs is collected, and thus how it is stored.
"Even though individual trade repositories are being set up to handle specific markets - credit-default swaps, interest-rate swaps, etc - it needs to be possible to see the pattern of risk and flows across markets and products.
"Recognising that, the [Financial Stability Board] has called for the relevant authorities… to set requirements for reporting of transactions to trade repositories that meet the needs of financial stability analysis.
"This work needs a higher profile."
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