The Financial Stability Board (FSB) has published the following reports:

• Re-hypothecation and Collateral Re-use: Potential Financial Stability Issues, Market Evolution and Regulatory Approaches; and
• Non-Cash Collateral Re-use: Measure and Metrics.

In the first report the FSB states that there is no immediate case for harmonising regulatory approaches to re-hypothecation. However, the FSB encourages FSB member jurisdictions to implement Recommendation 7 of its August 2013 Policy Framework for Addressing Shadow Banking Risks in Securities Lending and Repos which provides a common basis for authorities to design their regulations with respect to re-hypothecation of client assets. The FSB also encourages authorities to consider monitoring collateral re-use activities beyond securities financing transactions as appropriate.

The second report finalises the measure and metrics of non-cash collateral re-use in securities financing transactions that authorities will monitor for financial stability purposes. This follows an earlier FSB consultation last year which considered possible emasures for assessing collateral re-use.

View FSB publishes reports on the re-hypothecation of client assets and collateral re-use, 25 January 2017