Regulation may force banks out of repo, says NY Fed

Banks will "revisit their presence" due to liquidity and leverage charges

Jeanmarie Davis, Federal Reserve Bank of New York

Banks may consider pulling out of the repurchase agreement and securities lending businesses completely as new liquidity and leverage rules start to bite, according to the Federal Reserve Bank of New York. "All the capital and liquidity requirements that will affect that book of business are still in development, but certainly we do realise that there will be capital and liquidity charges against these businesses. You can definitely anticipate that all firms will revisit their presence in thi