IMF sees need for post-pandemic fiscal reform | N.Y. Fed official: Emergency lending stabilized markets | Analysis: Initial margin jumped in Q1
July 9, 2020
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Developed and emerging economies must implement fiscal reform as soon as the coronavirus pandemic ends, says Mitsuhiro Furusawa, deputy managing director of the International Monetary Fund. Public debt is expected to exceed 100% of global GDP once countries have dealt with the crisis, Furusawa says.
Full Story: Reuters (7/8) 
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Emergency lending facilities from the Federal Reserve have accomplished the aim of stabilizing markets, despite modest use of some of them, says Daleep Singh, head of the markets group at the Federal Reserve Bank of New York. The central bank will change its approach if conditions require it, Singh says.
Full Story: Reuters (7/8),  MarketWatch (7/8) 
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Industry News and Trends
Data indicates that initial margin requirements in Q1 increased 23% for interest rate swaps, 46% for credit default swaps and 66% for futures and options. The "differences in relative increases between products and clearing services are surprising," writes Clarus Financial Technology CEO Amir Khwaja.
Full Story: Risk (subscription required) (7/8) 
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Regulatory Roundup
The European Parliament has approved Francois-Louis Michaud as executive director of the European Banking Authority, despite a vote against the appointment by the Economic and Monetary Affairs Committee. The committee had cited a lack of gender balance in senior positions.
Full Story: Reuters (7/8) 
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Some market participants are pushing for the transparency regime of Europe's revised Markets in Financial Instruments Directive to be improved through amendments when MiFID II is reviewed by the European Securities and Markets Authority. Some firms see a revamp as a way to have more trade data disclosed sooner, while banks say there should be an effort to make current data more usable.
Full Story: Risk (subscription required) (7/9) 
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UK Chancellor Rishi Sunak has unveiled a £30 billion package that features support for the leisure and property sectors and measures to encourage job retention. Sunak says the support is needed because the economy has contracted 25% in two months, erasing growth achieved since 2002.
Full Story: Bloomberg Tax (free content) (7/8),  Financial Times (subscription required) (7/8) 
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Insurers, banks and hedge funds could face bigger-than-expected losses on collateralized loan obligations, according to a paper from the Bank for International Settlements. The paper warns of a "higher likelihood of clustered defaults."
Full Story: MLex (free content) (7/7) 
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European Central Bank President Christine Lagarde reflects on her earliest days in the post and outlines the bank's direction, playing down further monetary loosening and encouraging a pan-European recovery fund.
Full Story: Financial Times (subscription required) (7/8) 
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The Federal Reserve has ended 10 months of intervention in the market for short-term funding. Intervention began in September and peaked in March.
Full Story: Financial Times (subscription required) (7/8) 
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