Is the part that is not included in the ''largely based upon 140% of customer debit balances'', coming from IB Stock Enhancement Yield Program?
Please list the 'proprietary operations'(Any sort of risk that IB is taking that is not in US treasuries, Agencies or FDIC guaranteed debt) from IB and how they are financed
Thank you IB-AN for posting this information. Indeed, the Reuters article may need some corrections. With all the different numbers in those statements and the different "experts" flying around here and interpreting on their own, it's hard to not get confused and worried.
Anyone have any data about Vision Financial Markets, re: hypothecation? The clause is in their agreements.
I think we should start a thread that monitors the repo assets to repo liability ratio's of the major brokers on a full time basis. So if a firm's ratio got up to MF Global like levels in the future the EliteTrader community would be alerted and can take action.
They said they didn't do that with CLIENT money but they can do it by borrowing from third parties. Indeed, that was Mr Corzine's plans for MF Global
If you refer to the balance sheet, you'll note that customer receivables (e.g., margin debits) total $9.31 billion which at 140% total approximately $13.0 billion. You are correct in that we do don't fully utilize this capacity.
Here is a key question. Lets say that a broker does re-hypo 140% of the assets and then for some reason the broker immediately declares bankrupcy. Now you have assets that theoretically part of a customer's account at another firm. Assuming all rules have been followed, are customer accounts still segregated? What happens to the re-hypo assets when a firm goes under? I ask this because while I'm glad IB appears to be using only a small part of its re-hypo capacity, there is no guarantee that this won't change in the future, especially if IB itself ever faces a liquidity crunch.