Some lawyers have theorized that MF Global might have used customer funds as collateral to back its own trades, a process called "rehypothecation." ❋ Joe Light (2011)
Because of this so-called rehypothecation agreement, Olivant couldn't locate the UBS stock when Lehman filed for bankruptcy in September or vote the shares at a UBS shareholder meeting in October. ❋ Unknown (2008)
In return for lending money to hedge funds and on other financial products including derivatives, banks have been allowed to use client assets as collateral for their own loans or other leveraged deals, in a process known as "rehypothecation". ❋ Unknown (2009)
"Funds have found that assets such as equities whose recovery from the prime brokerage division should have been straightforward are in doubt because of" rehypothecation ". ❋ Unknown (2009)
"Every agreement I've seen permits rehypothecation." ❋ Joe Light (2011)
When breached, the broker's rehypothecation rights are reduced. ❋ Unknown (2008)
This has raised concerns about the level of rehypothecation at other brokerage houses. ❋ Unknown (2008)
At issue is rehypothecation, a common practice where a broker appropriates a client's assets, posted with the broker as collateral, in exchange for offering the client easier credit terms. ❋ Unknown (2008)
For the hedge funds, there are straightforward ways to counter this rehypothecation risk. ❋ Unknown (2008)
By lending out clients 'securities or using them as collateral, typically for repurchase agreements, rehypothecation lets brokers enhance their own returns. ❋ Unknown (2008)
Bonner & Co., brokers in Wall Street, presented us with the problem of business "rehypothecation." ❋ Mrs. T. De Witt Talmage (1867)
Regulators are moving towards imposing limits on rehypothecation. ❋ Unknown (2010)
So Lehman seems to have put a chill into the rehypothecation game, and the concurrent reduction in securities lending compounded the problem. ❋ Unknown (2009)
The report, titled "Deleveraging After Lehman - Evidence from Reduced Hypothecation" concludes that the practice of rehypothecation dropped off just as hedge funds began to think the unthinkable: what if their own prime broker went belly up? ❋ Unknown (2009)
As Singh and Aitken argue, rehypothecation has been hit by a bit of a double-whammy. ❋ Unknown (2009)
"Hedge funds are increasingly negotiating their prime broker agreements, revising and often reducing their rehypothecation levels," said Mr Ketteringham. ❋ Unknown (2009)
The new IMF working paper (by Manmohan Singh of the IMF and James Aitken of UBS) finds that the collateral held by prime brokers that is eligible for rehypothecation fell not just because Lehman bought the farm, but also because clients of other major prime brokers pulled in the reigns - reducing the assets made available for rehypothecation. ❋ Unknown (2009)
