On August 29, 2013, the Financial Stability Board (FSB) issued its finalized policy framework for its securities lending and repo workstream. As part of a larger examination of shadow banking, the FSB focused on five specific areas in which policies are needed to mitigate the potential systemic risks associated with shadow banking, with one of these five areas being securities lending and repo. Following up on their November 2012 consultation paper, the FSB has issued its final Policy Framework for Addressing Shadow Banking Risks in Securities Lending and Repos. This document sets out recommendations for addressing financial stability risks in this area, including enhanced transparency, regulation of securities financing, and improvements to market structure. It also includes consultative proposals on minimum standards for methodologies to calculate haircuts on noncentrally cleared securities financing transactions and a framework of numerical haircut floors.

Treasury Secretary J. Lew still sees money market funds and tri-party repo as unfinished business in the nation's quest to control risks to financial stability. In May 21, 2013 testimony before the Senate Committee on Banking, Housing, and Urban Affairs, Lew delivered the Financial Stability Oversight Council's (FSOC) annual report to Congress. Secretary Lew summarized the conclusions and recommendations made by the FSOC in its third annual report, assessing significant financial market and regulatory developments, potential emerging threats to financial stability, and recommendations to strengthen the financial system. Among the conclusions, Secretary Lew testified that FSOC remains very worried about the risks posed by wholesale funding markets, particularly, money market funds and tri-party repo. Despite the long list of rules, regulations, and structural changes already implemented in other areas, money market fund tri-party repo regulations are still a work in progress. According to Lew, this leaves the financial system still very vulnerable to destabilizing fire-sales in the money fund and tri-party repo markets. Such events can rapidly cross borders and economies, and wreaking havoc on fragile economic recoveries.