Reuters ahead with U.S. Treasury’s plans to protect repurchase market

Reuters was first to report important details on Jan. 28 of how the U.S. Treasury may seek to protect the huge repurchase market from unintended consequences of a new tax on big banks, part of the Obama administration’s crackdown on risk-taking in the financial sector. Based on comments from sources in the market, Reuters reported the government was considering a carve-out for Treasury bonds when it comes to assessing the new tax or risk-weighting assets so riskier instruments would be taxed at a higher rate than safer, more liquid securities such as Treasuries. The details were picked up soon after by the Financial Times’ Alphaville blog and the Reuters story was quickly emailed around Wall Street and Washington by traders and lobbyists. Financial blogger Yves Smith, the head of the investment management firm Aurora Advisors, highlighted the story in his top links of the day on his widely-read blog `Naked Capitalism’.