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Recent Editions
Risk Channel
North America
The Financial Stability Board (FSB) has raised the alarm about the potential risks in the leveraged short-term repo market. The global financial watchdog warned that asset managers, particularly hedge funds, may need to liquidate holdings during market stress, causing significant downward pressure on bond prices. The FSB's report highlights the need for regulators to address data gaps in the $16trn repo market and develop metrics to monitor vulnerabilities. "Strains in repo and government bond markets may spill over into each other or across multiple jurisdictions, given the international nature of repo markets," the report said, adding: "Given the importance of repo markets within the global financial system, it is critical to preserve their functionality, particularly during periods of stress."
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Risk Channel
UK/Europe
The UK government is increasingly concerned that the European Union's "Made in Europe" initiative could exclude British companies from supply chains in key sectors including automotive, technology and green energy. The UK is lobbying the EU against restricting market access for British firms, and is pushing for the EU to broaden its industrial policy concept to reflect cooperation with like-minded partners, Bloomberg reports. “The question for the UK is not just whether it will receive preferential treatment under new ‘Made in EU’ rules, but also how that treatment will stack up against other EU trade partners such as Japan, Turkey and Switzerland,” observes Sam Lowe, partner at London-headquartered business management consultancy Flint Global. “The worst of all worlds would be for UK companies to lose out against both EU competitors and competitors from elsewhere.”
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