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Financials

Fed considering minimum margins for securities financing -Fischer

WASHINGTON, Dec 3 (Reuters) - The Federal Reserve is developing regulations that would set minimum margins for securities financing transactions as it looks to contain risk and increase understanding of nonbank financial institutions, its vice chairman, Stanley Fischer, said on Thursday.

“The more stringent regulation of the banking sector may push short-term financing activities to less regulated entities,” he said in prepared remarks at a financial stability conference.

The new rules, intended to “limit such regulatory arbitrage,” would “apply to all market participants, thereby mitigating the risks associated with regulation along institutional lines,” he added.

The comments come as regulators turn their gaze to “shadow banking,” and Fischer said both policymakers and researchers “need better models and data to understand the interconnections between the banking system and nonbank financial institutions.”

The remarks did not mention interest rates or inflation. (Reporting by Lisa Lambert; Editing by Andrea Ricci)

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