Analysts at Fitch Ratings are warning that the U.S. market for borrowing and lending securities could face increased risks if the Basel III capital and liquidity rules for banks bolster trading of repurchase agreements. "Stricter bank regulations, such as Basel III, could push some bank-intermediated activities, particularly those involving riskier exposures subject to higher capital charges, into the shadow banking sector," Kellie Geressy-Nilsen, Martin Hansen and Robert Grossman, analysts at the rating agency, wrote in a report.

Related Summaries