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Repos make the news

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The big news about the repurchase market in 2015 was that it made the news. After decades when the largest financial market in the world rarely appeared in public, in 2015 repos finally hit the big time. At least 140 … Continue reading

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Commentary: SIFMA report ignores repo risk

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Dear readers, Last month the Securities Industry and Financial Markets Association, better known as SIFMA, published its US Repo Market Fact Sheet, 2015. This fact sheet contains the following paragraph: Safety of the repo market: The repo market has been … Continue reading

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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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2008 Fed meetings give blow by blow of crisis

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With the Federal Reserve’s release of the transcripts of key Fed meetings in 2008, anyone can read in detail how the financial crisis unfolded in that pivotal year. These transcripts, of the 14 meetings of the Federal Open Market Committee, should … Continue reading