Banks not fully prepared for repo risks – BoE’s Benjamin
Margining practices fail to account for “jumps to illiquidity”, executive director says
UK supervisors have concluded banks are not doing enough to guard themselves and clients against risks posed by the repo market, the Bank of England’s Nathanaël Benjamin said today (July 18).
The BoE executive director said banks’ margining practices “often fall short of supervisory expectations”.
The BoE has been increasingly focusing on the potential for instability in the repo market, after several crises in recent years. Sudden asset price moves can trigger margin calls that force non-banks to
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