Strong Wholesale
Funding Regulations
www.TheForexNittyGritty.com
The new US Federal Reserve
chairman, Janet Yellen, spoke recently
about strong wholesale funding rules.
As reported in the...
Yellen focused on liquidity issues in
banks, a problem that has been
partially addressed by raising
international standard...
Before We Continue…
Click the links below to get your
FREE training materials.
Free Weekly Investing Webinars
Don’t miss t...
The need for strong wholesale funding
regulations goes back to the near
collapse of financial markets in 2008
when large b...
The Fed believes that strong
wholesale funding regulations are
needed on top of the so called Basel
rules which raised cap...
For those of us who are not
international bankers, however, just
what is wholesale funding?
http://www.theforexnittygritty...
Wholesale Funding
http://www.theforexnittygritty.com/forex/strong-
wholesale-funding-regulations
Banks rely on wholesale funding for
capital when deposits are low such as
when interest rates are very low or
when the eco...
Wholesale funding is the use of other
sources of capital outside of core
deposits used by banks to manage
operations and l...
Sources of wholesale funding include
monies from local, state and federal
sources, advances from the U.S.
Federal Home Loa...
A major issue with wholesale funding
is that it is typically very interest rate
sensitive.
http://www.theforexnittygritty....
Sources of wholesale funding such as
wealthy foreign investors commonly
chase high interest rates and can
easily pull a la...
Whatever the reason, when wholesale
funding drops off, a bank will not have
enough working capital to do business.
http://...
This is what happened to many large
banks during the recent financial crisis.
http://www.theforexnittygritty.com/forex/str...
This is why Fed chairman Yellen is
talking about stronger wholesale
funding regulations.
http://www.theforexnittygritty.co...
Basically when banks are less
leveraged they are more secure.
http://www.theforexnittygritty.com/forex/strong-
wholesale-f...
However, the Fed has been fighting a
battle to insure liquid capital markets
since the 2008 market crash and
before and is...
Is Any of This
Working?
http://www.theforexnittygritty.com/forex/strong-
wholesale-funding-regulations
Deutsche Bank details its funding and
wholesale funding sources in its
Investor Relations Funding online
page.
http://www....
Diversification of our funding profile in
terms of investor types, regions,
products and instruments is an
important eleme...
Other customer deposits and borrowing
from wholesale clients are additional
sources of funding. Unsecured wholesale
fundin...
Unsecured wholesale funding comprises a
range of unsecured products e.g.
Certificates of Deposit (CDs), Commercial
Paper (...
The bank goes on to show through a
number of graphs where its wholesale
funding comes from.
http://www.theforexnittygritty...
Is the Fed Doing
Enough or Too
Much?
http://www.theforexnittygritty.com/forex/strong-
wholesale-funding-regulations
From the viewpoint of a Forex trader
stable financial markets are good for
hedging risk in international
transactions.
htt...
Volatile markets can lead to trading
profits if the speculator can
successfully anticipate which currency
will win and whi...
Stronger whole funding regulations are
part of the picture of what the Fed is
doing.
http://www.theforexnittygritty.com/fo...
And the stimulus program in which the
Fed purchased US Treasuries and
other bonds is another.
http://www.theforexnittygrit...
The Fed is tapering its stimulus
program and is generally expected to
close out monthly purchases by year
end. Interest ra...
The current online issue of Forbes
speculates on when interest rates will
rise and a change in Federal Open
Market Committ...
The FOMC participants raised their short-
term interest rate projections from 0.75%
by the end of 2015 to 1.0%. Though the...
A concern for Forex traders is how well
the Fed under Yellen can handle all
that is on its plate. And a bigger
concern is ...
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Strong Wholesale Funding Regulations

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Strong Wholesale Funding Regulations

www.theforexnittygritty.com/forex/strong-wholesale-funding-regulations

The new US Federal Reserve chairman, Janet Yellen, spoke recently about strong wholesale funding rules. As reported in the online Fox News,
Yellen focused on liquidity issues in banks, a problem that has been partially addressed by raising international standards for the amount of capital banks need to keep in reserves.

The need for strong wholesale funding regulations goes back to the near collapse of financial markets in 2008 when large banks did not have sufficient cash and borrowers could not get help in short term credit markets. The Fed believes that strong wholesale funding regulations are needed on top of the so called Basel rules which raised capital reserve requirements for major banks. For those of us who are not international bankers, however, just what is wholesale funding?

Wholesale Funding

Banks rely on wholesale funding for capital when deposits are low such as when interest rates are very low or when the economy is weak. Wholesale funding is the use of other sources of capital outside of core deposits used by banks to manage operations and limit risk. Sources of wholesale funding include monies from local, state and federal sources, advances from the U.S. Federal Home Loan Bank, the primary credit program of the United States Federal Reserve, foreign source deposits, deposits from internet or CD listing services and brokered deposits.

A major issue with wholesale funding is that it is typically very interest rate sensitive. Sources of wholesale funding such as wealthy foreign investors commonly chase high interest rates and can easily pull a large chunk of a bank’s wholesale funding overnight. Whatever the reason, when wholesale funding drops off, a bank will not have enough working capital to do business. This is what happened to many large banks during the recent financial crisis. This is why Fed chairman Yellen is talking about stronger wholesale funding regulations. Basically when banks are less leveraged they are more secure. However, the Fed has been fighting a battle to insure liquid capital markets since the 2008 market crash and before and is not going to so tighten up credit markets as to cause another credit crunch.

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Strong Wholesale Funding Regulations

  1. 1. Strong Wholesale Funding Regulations www.TheForexNittyGritty.com
  2. 2. The new US Federal Reserve chairman, Janet Yellen, spoke recently about strong wholesale funding rules. As reported in the online Fox News, http://www.theforexnittygritty.com/forex/strong- wholesale-funding-regulations
  3. 3. Yellen focused on liquidity issues in banks, a problem that has been partially addressed by raising international standards for the amount of capital banks need to keep in reserves. http://www.theforexnittygritty.com/forex/strong- wholesale-funding-regulations
  4. 4. Before We Continue… Click the links below to get your FREE training materials. Free Weekly Investing Webinars Don’t miss these free training events! http://www.profitableinvestingtips.com/free- webinar Forex Conspiracy Report Read every word of this report! http://www.forexconspiracyreport.com
  5. 5. The need for strong wholesale funding regulations goes back to the near collapse of financial markets in 2008 when large banks did not have sufficient cash and borrowers could not get help in short term credit markets. http://www.theforexnittygritty.com/forex/strong- wholesale-funding-regulations
  6. 6. The Fed believes that strong wholesale funding regulations are needed on top of the so called Basel rules which raised capital reserve requirements for major banks. http://www.theforexnittygritty.com/forex/strong- wholesale-funding-regulations
  7. 7. For those of us who are not international bankers, however, just what is wholesale funding? http://www.theforexnittygritty.com/forex/strong- wholesale-funding-regulations
  8. 8. Wholesale Funding http://www.theforexnittygritty.com/forex/strong- wholesale-funding-regulations
  9. 9. Banks rely on wholesale funding for capital when deposits are low such as when interest rates are very low or when the economy is weak. http://www.theforexnittygritty.com/forex/strong- wholesale-funding-regulations
  10. 10. Wholesale funding is the use of other sources of capital outside of core deposits used by banks to manage operations and limit risk. http://www.theforexnittygritty.com/forex/strong- wholesale-funding-regulations
  11. 11. Sources of wholesale funding include monies from local, state and federal sources, advances from the U.S. Federal Home Loan Bank, the primary credit program of the United States Federal Reserve, foreign source deposits, deposits from internet or CD listing services and brokered deposits. http://www.theforexnittygritty.com/forex/strong- wholesale-funding-regulations
  12. 12. A major issue with wholesale funding is that it is typically very interest rate sensitive. http://www.theforexnittygritty.com/forex/strong- wholesale-funding-regulations
  13. 13. Sources of wholesale funding such as wealthy foreign investors commonly chase high interest rates and can easily pull a large chunk of a bank’s wholesale funding overnight. http://www.theforexnittygritty.com/forex/strong- wholesale-funding-regulations
  14. 14. Whatever the reason, when wholesale funding drops off, a bank will not have enough working capital to do business. http://www.theforexnittygritty.com/forex/strong- wholesale-funding-regulations
  15. 15. This is what happened to many large banks during the recent financial crisis. http://www.theforexnittygritty.com/forex/strong- wholesale-funding-regulations
  16. 16. This is why Fed chairman Yellen is talking about stronger wholesale funding regulations. http://www.theforexnittygritty.com/forex/strong- wholesale-funding-regulations
  17. 17. Basically when banks are less leveraged they are more secure. http://www.theforexnittygritty.com/forex/strong- wholesale-funding-regulations
  18. 18. However, the Fed has been fighting a battle to insure liquid capital markets since the 2008 market crash and before and is not going to so tighten up credit markets as to cause another credit crunch. http://www.theforexnittygritty.com/forex/strong- wholesale-funding-regulations
  19. 19. Is Any of This Working? http://www.theforexnittygritty.com/forex/strong- wholesale-funding-regulations
  20. 20. Deutsche Bank details its funding and wholesale funding sources in its Investor Relations Funding online page. http://www.theforexnittygritty.com/forex/strong- wholesale-funding-regulations
  21. 21. Diversification of our funding profile in terms of investor types, regions, products and instruments is an important element of our liquidity risk management framework. Our most stable funding sources are capital markets and equity, retail, and transaction banking clients. http://www.theforexnittygritty.com/forex/strong- wholesale-funding-regulations
  22. 22. Other customer deposits and borrowing from wholesale clients are additional sources of funding. Unsecured wholesale funding represents unsecured wholesale liabilities sourced primarily by our Global Liquidity Management business. Given the relatively short-term nature of these liabilities, they are primarily used to fund cash and liquid trading assets. http://www.theforexnittygritty.com/forex/strong- wholesale-funding-regulations
  23. 23. Unsecured wholesale funding comprises a range of unsecured products e.g. Certificates of Deposit (CDs), Commercial Paper (CP) as well as term, call and overnight deposits across tenors primarily up to one year. In addition, included within financing vehicles, is € 11 billion of asset- backed commercial paper (ABCP) issued through conduits. http://www.theforexnittygritty.com/forex/strong- wholesale-funding-regulations
  24. 24. The bank goes on to show through a number of graphs where its wholesale funding comes from. http://www.theforexnittygritty.com/forex/strong- wholesale-funding-regulations
  25. 25. Is the Fed Doing Enough or Too Much? http://www.theforexnittygritty.com/forex/strong- wholesale-funding-regulations
  26. 26. From the viewpoint of a Forex trader stable financial markets are good for hedging risk in international transactions. http://www.theforexnittygritty.com/forex/strong- wholesale-funding-regulations
  27. 27. Volatile markets can lead to trading profits if the speculator can successfully anticipate which currency will win and which will lose during a financial meltdown. http://www.theforexnittygritty.com/forex/strong- wholesale-funding-regulations
  28. 28. Stronger whole funding regulations are part of the picture of what the Fed is doing. http://www.theforexnittygritty.com/forex/strong- wholesale-funding-regulations
  29. 29. And the stimulus program in which the Fed purchased US Treasuries and other bonds is another. http://www.theforexnittygritty.com/forex/strong- wholesale-funding-regulations
  30. 30. The Fed is tapering its stimulus program and is generally expected to close out monthly purchases by year end. Interest rates are at issue here and there effect on the economy, national and global. http://www.theforexnittygritty.com/forex/strong- wholesale-funding-regulations
  31. 31. The current online issue of Forbes speculates on when interest rates will rise and a change in Federal Open Market Committee interest rate targets. http://www.theforexnittygritty.com/forex/strong- wholesale-funding-regulations
  32. 32. The FOMC participants raised their short- term interest rate projections from 0.75% by the end of 2015 to 1.0%. Though the increase wasn’t very large, it was a move the markets did not embrace judging by the ensuing sell off in equities. The 2016 forecast jumped from 1.75% to 2.25%. This also seems to indicate a change in the FOMC’s thinking. http://www.theforexnittygritty.com/forex/strong- wholesale-funding-regulations
  33. 33. A concern for Forex traders is how well the Fed under Yellen can handle all that is on its plate. And a bigger concern is how the market reads the actions of the Fed and will over adjust driving currency prices too high or too low. http://www.theforexnittygritty.com/forex/strong- wholesale-funding-regulations

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