Peter Tomlinson and Rick Watson from the Association for Financial Markets in Europe (AFME) explain the ins and outs of the Securities Financing Transactions Regulation
by Bethan Rees
is an EU reporting obligation designed to increase the transparency of the securities financing transactions (SFTs) market. Emerging from the 2008 financial crisis, international regulators revealed important regulatory gaps, and securities lending and repurchase transactions came under great scrutiny. The regulation document says
that the crisis “highlighted the need to improve transparency and monitoring not only in the traditional banking sector but also in areas where bank-like credit intermediation, known as shadow banking, takes place … having already been estimated to amount to close to half of the regulated banking system”.
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