Day: 9 January 2019

Central Banks Remain Cautious on Digital Currencies: BIS

A survey of central banks by the Bank for International Settlements (BIS) finds that while a majority are collaboratively looking at the implications of issuing a central bank digital currency (CBDC), indeed many have reached the stage of considering practical issues, they are proceeding cautiously with few reporting plans to actually issue a digital currency in the short or medium term.
The survey had 63 respondents, which the BIS says represents around 80% of the world’s population, and asked about central banks’ current work on CBDCs, what motivates that work, and how likely their issuance of a CBDC is.

New York Fed Publishes Policy on Confidential Market Information

The Federal Reserve Bank of New York has taken the step of publishing a statement detailing how it handles confidential information from foreign exchange and Treasury market participants.
The New York Fed says it is committed to the use and handling of confidential information about participants in financial markets “in a manner that promotes the integrity and efficiency of these markets, and is consistent with goals of the Treasury Market Practices Group (TMPG) Best Practices and the FX Global Code”.

LCH Touts First Cross-Currency Swap Compression

For the first time, trades registered in LCH’s SwapAgent service were successfully compressed in TriOptima’s multilateral USD/EUR cross-currency swap compression cycle. Using its triReduce compression service, €4.5 billion in notional of trades registered in SwapAgent were compressed. During the run, SwapAgent and non-SwapAgent trades were blended together to achieve better benefits from the compression.Compression is the process by which members can eliminate offsetting trades to reduce notional outstanding and the number of line items in a portfolio. Capital requirements such as those introduced under the Basel III leverage ratio have incentivised banks to reduce notional outstanding.

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