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FT Alphaville readers are well versed on the potential downsides of collateral scarcity in western markets.
But consider how a collateral scarcity problem might unfold in an emerging market in which the most valued form of collateral isn’t national debt denominated in your own debt but rather a commodity like gold, whose supply is dictated by externalities outside of a government’s control? Read more
Live markets commentary from FT.com
Microsoft is to buy Nokia’s mobile phone business and patents for €5.44bn || Vodafone shareholders set for $84bn payout || Li says he’s confident China will meet economic goals || Banks face new bail-in-able debt requirements || Citigroup is dialing back its ‘alternative’ holdings || Japanese government takes over Fukushima strategy || Australian retail sales disappoint || Markets Read more
When it comes to understanding the Fed’s recently touted — but initially overlooked — fixed-rate, full-allotment overnight reverse repurchase agreement facility, Cardiff covered pretty much all the bases here.
That said, there was a great quote recently in a follow up piece with FT colleagues. Barclays’ Joseph Abate said the facility resembled an “all you can eat collateral buffet” due to the fact that the trade would provide a fully collateralised investment opportunity with the Fed to almost all parts of the financial market. Read more
Asian stocks rise || Microsoft to buy Nokia phones business for €5.44bn || Vodafone investors set for record $84bn payout || Li confident China will meet economic goals || New bank bail-in bond requirements likely || Citi disposes of $6bn in alternative assets in a month || Private equity groups set to buy Frob-owned EVO Banco || US hedge funds criticise Co-op Bank || Japanese government takes over Fukushima plan Read more