US financial officials are working on a new set of rules which would force firms to report details of their repo trades.

Speaking in Michigan, Richard Berner, director of the Office of Financial Research (OFR), said he intends to conduct a rulemaking on repo markets soon.

OFR, an agency operating within the US Treasury Department, was established following the 2008 financial crisis.

It is tasked with promoting financial stability has extensive authority in the area of data sharing.

This summer it conducted “pilot” data collection which provided three-day snapshot of securities lending and repo activity.

“Data describing bilateral repurchase agreements and securities lending were scant in the run up to the financial crisis, and they still are,” Berner said in a speech at the University of Michigan.

“Guided by the pilots, we are pursuing a permanent data collection for repo transactions. These data will help us better monitor a $1.8trn component of the $4.4trn securities financing markets — one that amplified the financial crisis through runs and asset fire sales.”

Berner added that a rulemaking is “superfluous” if the desired data already exist elsewhere, either at a regulator or at a firm. 

He also said that the OFR’s subpoena power, which can be used use against resistant financial firms, is a great tool to have in the toolkit.

“It enhances our power to persuade,” he told delegates attending a conference on financial data at the university in Ann Arbor.

“A subpoena carries costs — to the reputation of the organisation and through the sometimes time-consuming process of judicial enforcement.”

The OFR’s growing interest in securities lending a repo data collection mirrors a move by officials in Europe, who are currently finalising the Securities Financing Transactions Regulation (SFTR).

From mid-2018, SFTR will force firms to report details of their securities finance transactions to trade repositories for the benefit of regulators.

At a minimum, reporting must include the details of the parties involved in a trade, principal amount, currency, collateral assets, repo rate, lending fee, margin lending rate, haircut and maturity date.

In his remarks, OFR’s Berner added that the financial system has evolved and moved on, so should data collections.

“Granular data are essential for our work. That’s because, like policymakers and risk managers, we are in the business of assessing tail risks.

“Looking at medians and means is helpful for sizing a market or an institution, but risk assessment requires analyzing the whole distribution.

“Granular data and their analysis help us gauge risks related to particular activities, and to concentration, interconnectedness, complexity, financial innovation, and the migration of financial activity.”