MNI: FSB Set To Explore Central Clearing, All-To-All Trading

The G20's Financial Stability Board on Thursday put forward a number of international policy proposals to address systemic vulnerabilities in non-banks, including suggesting jurisdictions consider ways to increase the availability and use of central clearing for government bond cash and repo transactions and the use of all-to-all trading platforms.

The policy proposals involve largely repurposing existing policy tools rather than creating new ones, and focus on reducing excessive spikes in the demand for liquidity by addressing the vulnerabilities that drive those spikes, including follow-up work on non-bank leverage and on margining practices.

To enhance the resilience of liquidity supply in stress, the report notes individual authorities may consider ways to increase the availability and use of central clearing for government bond cash and repo transactions; the use of all-to-all trading platforms; and measures to enhance the transparency of both pre- and post-trade bond and repo markets.

On Wednesday, the Treasury Market Practices Group, a group sponsored by the New York Fed, released a consultative report on clearing and settlement in the Treasury market. The SEC has proposed mandating central clearing.