Even though this is the US it is nonetheless topical to what I can see happening in the Uk in one regulatory form or another. That is ,if you want to park your collateral in exchange for money you're not going to be free to simply take that money and use it in any old way as you might have done before. Going forward how you use it in terms of the risk attached etc is going to be monitored because afterall the collateral remains the property of the insitution and the only safe guard a central bank has on it's value is the ability of the bprrowing banks to take it back at value at some point in the future which means the central bank has to take steps to ensure the borrowing banks remain prudently solvent and of course that passes all the way along the line right down to Little Johnny who just wants a sub to buy some marbles. This is the antithesis of recent banking behaviour where much of the profits made were made simply by applying large leaverage to relatively small margins on large volumes...take that away and it looks to me like a hard market in which to make money.
The link... Fed goes to brokerages to monitor their state: report: Financial News - Yahoo! Finance
The link... Fed goes to brokerages to monitor their state: report: Financial News - Yahoo! Finance
