Central banks
Hedge fund surge in momentum EGB trading stirs unease
Dealers voice concerns that crowded positions could lead to liquidity squeezes following mass unwinds
Financial industry adoption of distributed ledger technologies: implications for central bank money settlement
The authors investigate the Eurosystem's exploring of central bank money settlement through distributed ledger technology and look forward to potential next steps.
For US Treasury troubles, treat the cause not the symptom
Regulatory alarm about hidden risk in the Treasury futures market misses the point, fund association execs write
For the Fed discount window, destigmatisation starts at home
US supervisors must change tack to encourage central bank liquidity utilisation, writes Bill Nelson
AI, quantum computing and tokenisation set to transform finance – Menon
But significant barriers remain preventing the technologies from unlocking their full potential
How steepener trades burned hedge funds, and what happened next
Delays to central bank rate cuts torpedo popular trade, causing funds to pull capital – to the chagrin of sell-side desks
Reframing the Fed’s discount window
Funding window incentives and collateralised credit lines could transform bank liquidity in a crisis, argues Bill Nelson
Decoding the decoupling in US and eurozone inflation
ECB rates cut and Fed’s refusal to follow suit point to differing fundamentals in stateside and EU economies
Fed needs to fix discount window op risk – ECB official
Suggests the BTFP might have been unnecessary if existing US facility was more reliable
FX books bulge in quant investment field
Carry strategies attract bulk of interest; banks eye growth in volatility, intraday and emerging market replication
Just solve it: a simple method to improve the design and performance of liquidity-saving mechanisms
The authors put forward a novel LSM algorithm and compare its performance with two of the best known offsetting algorithms.
Centralized and decentralized payments networks: a simple cost comparison
This paper seeks to determine the feasibility of a widespread adoption of cryptocurrencies in payments by comparing centralized payments systems with cryptocurrencies.
Op risk data: Tech glitch gives customers unlimited funds
Also: Payback for slow Paycheck Protection payouts; SEC hits out at AI washing. Data by ORX News
Japanese banks’ leverage ratios keep rising as BoJ relief becomes permanent
Norinchukin reaps largest benefit on eve of Covid-19-era exemption being made permanent
Banks will not be frowned upon for discount window borrowing – Fed official
Risk Live: more banks have completed paperwork to access Fed lending facility than a year ago
Choppy inflation may be the worst inflation
Investors can build strategies to suit fast-rising prices, or slow-rising prices. What trips them up is the inflation foxtrot: slow, slow, quick, quick, slow
FX options traders rethink vol drivers amid macro uncertainty
Market-makers believe more and more events will influence options pricing as political risk bubbles up during 2024
Interbank lending plummets at major European banks
Reduced repo operations and TLTRO repayments among drivers
‘Brace, brace’: quants say soft landing is unlikely
Investors should prepare for sticky inflation and volatile asset prices as central banks grapple with turning rates cycle
Undeterred, hedge funds bet on euro swap steepeners
Expected rate cuts and pension reforms are driving steepener flows, but large pension funds may not be finished hedging at the long end
BoE edges closer on FX settlement risk clarity
Central bank’s FX head says new survey will help to identify where risks may lie