Nematrian Reference Library
[this page | back links]
Set out below is information (held by the Nematrian website) on the reference you have selected
Pages on this website that contain links to this reference include
SystemicRiskReferences4
Reference | Title | Link |
Singh, M. and Aitken, J. (2010) | The (sizeable) Role of Rehypothecation in the Shadow Banking System | here |
Abstract
"This paper examines the sizable role of rehypothecation in the shadow banking system. Rehypothecation is the practice that allows collateral posted by, say, a hedge fund to its prime broker to be used again as collateral by that prime broker for its own funding. In the United Kingdom, such use of a customer’s assets by a prime broker can be for an unlimited amount of the customer’s assets while in the United States rehypothecation is capped. Incorporating estimates for rehypothecation (and the associated re-use of collateral) in the recent crisis indicates that the collapse in non-bank funding to banks was sizable. We show that the shadow banking system was at least 50 percent bigger than documented so far. We also provide estimates from the hedge fund industry for the “churning” factor or re-use of collateral. From a policy angle, supervisors of large banks that report on a global consolidated basis may need to enhance their understanding of the off-balance sheet funding that these banks receive via rehypothecation from other jurisdictions." |
See
here to choose a new Category/Sub-Category or
here for a list of all references held by the Nematrian website. Please
contact us if any of the above material is inaccurate or if there are references you think should be included that we have excluded or vice-versa.