News: Rehypothecation – good or bad ? | OTC Clearing and Regulations

19 June 2013 | Bill Hodgson

Rehypothecation can be very bad and be the devil which cannot be controlled and can become a monster which can eat up every one.

Interesting and perhaps controversial views from Ravikanth, for more see Rehypothecation – good or bad ? | OTC Clearing and Regulations.  



I love the #rehypothecationmonster (what a hashtag that would be!)Does the monster's one-eyedness represent the lack-of-foresight of the regulators allowing rehypothecation via triparty repo agreements?

Readers are invited to send in their pictures of the rehypothecation monster which I will display, and provide a suitable prize for the most imaginative entry.

Reblogged this on Carl A R Weir's Blog.

Rehypothecation can be considered good as long has the tri-party repo agent's operational software for collateral-management has the ability to track and recall the collateral back to it original participant, where the reuse is enable on their contact agreement. This was successful implemented with one of the tri-party agent ICSD and there was never any issue whatsoever, as long as a the hierarchy of reuse is tracked and robustly implemented.