Week InReview

Bond market liquidity... what, me worry?

"There's a big fear that Mnuchin doesn't care, that he and the administration don't reform the market," said Jim Greco, a co-founder of Direct Match Holdings Inc., a Treasury-trading firm that's struggled to break the banks' death-grip on the market. At Finra's Rockville office, employees are creating a system to collect data on daily Treasury trading that at first will be shared only with regulators. The idea was that the next step could be that prices would be shared with the public, though Greco doubts that will happen.

Fri Mar 10, 2017
Let's recap
In case you missed it . . .
Rolling back Dodd-Frank financial law isn't close at hand
Here's the latest indication Wall Street regulations won't be gutted anytime soon: Republicans who write financial laws are starting to focus on less controversial measures (Mar 9)

U.S. regulators push new ETF rules despite industry's howl
U.S. regulators are advancing rules this week to tighten standards on the ballooning exchange-traded fund industry over the objections of asset managers (Mar 8)

Mnuchin's Treasury picks stalled by Trump loyalty questions
The impasse is fueling impatience inside a department eager to put its mark on issues ranging from international economic diplomacy at a Group of 20 meeting next week to a domestic tax overhaul that Mnuchin has promised will get done before September (Mar 8)

Politics 'tightening grip' on financial market behavior: BIS
Investors are focusing more on politics and have become more selective in what they buy, the Bank for International Settlements said in its latest signal that markets may be breaking free from a dependence on central bank support (Mar 6)

Banks set to win derivatives relief in new EU trading rules
Banks and asset managers have pushed for more than a year to have many of their derivatives exempted from new European Union trading rules the industry says would send costs spiraling. Now they're on the verge of success (Mar 6)
The Cyber Cafe
Cybersecurity news every Friday
What the CIA thinks of your antivirus program
Peppering the 8,000 pages of purported Central Intelligence Agency hacking data released by WikiLeaks are reviews of some of the world's most popular antivirus products. They suggest the American intelligence agencies are keenly aware of flaws in the products

Fake SEC eMails target execs for inside information
Cyber scammers are sending spoofed emails, purporting to be from the Security and Exchange Commission, aimed at lawyers, compliance managers, and other company officials

How to respond to a cyber attack
Following a breach, organizations should focus on mitigating damage and data loss and providing info to law enforcement
- CSO
Treasury's Mnuchin, IMF's Lagarde meet
Prep for G20 sessions next week
(Mar 9) -- U.S. Treasury Secretary Steven Mnuchin and International Monetary Fund Managing Director Christine Lagarde held a meeting in Washington to discuss global economic challenges and the upcoming G20 meetings of finance ministers in Baden-Baden. "Lagarde expressed the IMF's desire to continue close engagement with the U.S. to encourage policies that will promote growth, stability, and job creation in the U.S. and globally," IMF Communications Director Gerry Rice said in an emailed statement.
Central clearing in the repo market
OFR posts research brief
(Mar 9) --  The U.S. Office of Financial Research published a research brief, entitled, "Benefits and Risks of Central Clearing in the Repo Market." The brief says the repurchase agreement market is a major source of short-term funding in the financial system. Many repo transactions between dealers are centrally cleared. The brief, using data from the OFR's interagency bilateral repo data collection pilot, finds economic benefits for dealers in expanding central clearing to transactions between dealers and nondealer clients, but increased risks to the central counterparty.
IOSCO not worried about bond market liquidity
Little proof liquidity is down
(Mar 7) -- The International Organization of Securities Commissions said they have not found "substantial evidence showing that liquidity in the secondary corporate bond markets has deteriorated markedly from historic norms for non-crisis periods." An IOSCO study, which reviewed 2004-2015 liquidity with a focus on the period just prior to the financial crisis, "revealed meaningful changes to the characteristics and structure of the secondary corporate bond markets, including changing dealer inventory levels, increased use of technology and electronic trading venues, and changes in the role of participants and execution models."  IOSCO said that level of post-trade transparency may affect liquidity.
Binge reading disorder
Hand-curated, chosen with love
Where are the world's dollar deposits coming from?
Ahead of last year's  US MMF reforms, concerns, were mounting that non-US banks dependent on MMF dollar funds could end up struggling to locate alternative funding sources in time, triggering a dollar short squeeze. Nearly five months later we know that didn't happen.

Would-be Trump appointees say 'No Thanks' due to lobbying ban
One sign of how entrenched the revolving door has become in Washington

As regulations change, companies grapple with accountant shortage
The competition increasingly includes the big accounting firms, which are getting better at holding onto employees
Transparency.
Inclusiveness.
Consensus.