Strengthening the Backbone of Finance: Key Advances in U.S. Treasury Market Resilience Revealed!

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WASHINGTON, D.C. — The Inter-Agency Working Group on Treasury Market Surveillance (IAWG), comprising experts from several top financial regulatory bodies, recently published a progress report detailing significant strides in fortifying the U.S. Treasury market over the past year. This collaborative effort involves the U.S. Department of the Treasury, the Federal Reserve, the Securities and Exchange Commission (SEC), and the Commodity Futures Trading Commission, among others.

One of the notable achievements highlighted in the report is the SEC’s adoption of new rules facilitating the clearing of additional Treasury securities transactions. This move is expected to enhance market efficiency and transparency, vital for maintaining investor confidence and stability in the market. Additionally, the Treasury Department has initiated a buyback program aimed at boosting market liquidity and refining cash management strategies, which could play a crucial role in ensuring the smooth functioning of the market during periods of stress.

Furthermore, the SEC has introduced rules mandating the registration of entities acting as dealers in the market, thereby increasing oversight and reducing risks associated with unregulated trading activities. The report also notes the dissemination of transaction data for on-the-run nominal coupon Treasury securities, which is anticipated to improve market transparency and participant decision-making.

Another key development is the rule finalized by the Treasury’s Office of Financial Research requiring the reporting of non-centrally cleared bilateral repurchase agreements. This regulatory step aims to provide more comprehensive data on market activities, ultimately supporting better risk assessment and management.

These measures collectively represent a robust framework for enhancing the resilience of the U.S. Treasury market, crucial for maintaining financial stability and safeguarding against systemic risks. The upcoming U.S. Treasury Market Conference will offer a platform for further discussions on these advancements and potential future policies to bolster market resilience.

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