Varying bank leverage ratio could fix ‘broken’ repo market

Risk Live: Repo with buy side should incur different leverage ratio, suggests big asset manager


The repo market is “broken” but there is a way for regulators to fix it: by applying different leverage ratio requirements to banks depending on the counterparty to the trade, according to the head of trading at HSBC Global Asset Management.

“When the leverage ratio applies…it should apply differently for the interbank market and for banks [trading] with end-customers,” said Daniel Leon, global head of trading, treasury management and global solutions at the $517 billion asset manager.


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