Week InReview | Wall Street firms ready themselves for new rules aimed at requiring them to eat what they cook Are asset managers vulnerable to fire sales? | A Paris restaurateur allows dogs, but bans his establishment to bankers | ICYMI + Binge Reading
Friday, February 19, 2016
Let's recap
In case you missed it . . .
Are asset managers vulnerable to fire sales?

NY Fed

(Feb 18)  Mutual funds are vulnerable to runs that can spill over and cause problems in the broader financial system, according to a blog post published on Liberty Street Economics by staffers at the Federal Reserve Bank of New York. The   bloggers find that, despite conventional wisdom to the contrary, mutual funds can be vulnerable to a run of sudden investor withdrawals, even when the fund has a floating net asset value (NAV) and no significant leverage. The authors explore how this exposure to a potential fire-sale might create systemic risk.
HFT more linked to volatility than trading volume
NY Fed
(Feb 17)  As the presence of high frequency trading has grown, cross-market activity between cash and futures markets is "more tightly linked" to volatility than "standard activity measures" like overall trading volume or number of trades, the Federal Reserve Bank of New York said in a blog post In recent years, much of the trading in U.S. Treasury and equity markets has been associated with nearly simultaneous trading between the leading cash and futures platforms. The bloggers investigate how the cross-market component of overall trading activity is related to market volatility.
Design of cash UST workup may create wider spreads
NY Fed
(Feb 16)  Design of workup, a tool for improving UST liquidity in interdealer market, may result in "increased incidence of wider spreads," the Federal Reserve Bank of New York said in a blog post. They exploit the tight relationship between the ten-year Treasury note traded on the BrokerTec platform and the corresponding Treasury futures contract to explore how the workup protocol affects trading in the interdealer market and to highlight the impact of technological changes on observed trading behaviors. 
Binge reading disorder
Hand-curated, chosen with love
A New Study Shows That Winners Will Cheat to Keep Winning
"Autoris√© aux chiens. Interdit aux banquiers": Paris restaurant allows dogs, but bans bankers ( Google Translate  required)
- 24 Presse 

Could Our Cruddy Stock Market Cause a Recession?
- Slate

Does My Dog Love Me?

The Plot to Steal the Color White From DuPont