LONDON'S LARGEST investment banks are to face a wide-ranging probe into their measurement and management of collateral amid concerns some may not be properly prepared for a sudden market downturn, according to the Financial Times .
The Financial Services Authority (FSA) has launched an investigation into the banks' systems for measuring and managing the collateral they demand from hedge funds, banks and other trading counterparties. The move, which the FSA describes as "thematic work", is the latest stage of the regulator's attempt to identify areas which may pose a problem for the financial system during a crisis. Other regulators around the world are likely to pay close attention to the outcome of the investigation, which may involve co-operation with the US Federal Reserve, says the paper. FSA officials stress...
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