Rehypothecation of assets a ‘driver of contagion’ during crisis, says SSG

Rehypothecation of client assets was one of the “dominant drivers of contagion” during the financial crisis, amplifying the market turmoil in the wake of the Lehman Brothers collapse, the Senior Supervisors’ Group (SSG) has concluded.

The body, consisting of financial regulators from Japan, Canada, France, Germany, Switzerland, the UK and the US, made the assertion in its report, Risk Management Lessons from the Global Banking Crisis of 2008, which was  issued in October as a follow-up to its fi