Category Archives: Finding a Fix

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Lenders drove the boom and the bust

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In the years leading up to the 2008 financial crisis, trillions of new dollars flooded into housing.  Why? Was it coaxed into the housing market by borrowers who convinced bankers they could pay back the loans? No. It gushed into … Continue reading

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Bankruptcy act of 2005 worsened boom and bust

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One puzzle about the 2008 financial crisis is what caused the financial markets to bubble and burst at that particular time. One reason was The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.  Its provisions encouraged lenders to lend into … Continue reading

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Economists who best understand repo are still working to stabilize it: 2014 in review

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A series of conferences and reports in the second half of 2014 show that the economists who best understand the repo phenomenon are still worried about it and working to stabilize it. This is welcome news, after months of concern … Continue reading

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Runs still threaten the repurchase market: 2014 in review

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As 2014 comes to a close,  it’s tempting to try to assess how much systemic risk has been wrung out of the repurchase market by six years of reforms. A fair summary would be: Much proposed but little imposed. In … Continue reading

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Don’t touch my repo

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The repo industry has dire warnings for anyone who wants to rein in its market. The warnings are a sobering, inside look at how important the repurchase market has become to the world’s flow of credit. From the International Capital … Continue reading

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U.S. Regulators: Repo is vital, and it’s dangerous

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In the past three months, U.S. regulators have issued nine warnings about danger in the repo market, a market they repeatedly describe as critical to the worldwide financial system but needing reform. Is anyone listening? The Financial Stability Oversight Council, … Continue reading

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The future looks a lot like the past

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“Regulation of shadow banking is starting to look more and more like regulation of traditional banking 100 to 150 years ago, when it took decades of runs on banks, bank failures and economic agony before  Congress in 1933 finally approved … Continue reading