Dealers turn to Asian assets for liquidity swap trades

Dealers access JGB pools for collateral upgrade trades – with Australian and Singapore dollar deals on the horizon

liquidity ratio

Last summer, BNY Mellon began facilitating a rather unusual trade flow out of Japan. The firm was using its Japanese trust bank as a vehicle to allow offshore broker-dealers to borrow Japanese government bonds from onshore lenders for terms of up to two years in exchange for a fee and lower-grade collateral. The JGBs would then be whisked away to be used as high-quality collateral in deals elsewhere. The platform has grown from one initial broker-dealer and lender to multiple broker-dealers and

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