Monthly Archives: August 2011

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Risk may move from credit default swaps to repos

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In the financial crisis of 2007-2008, much of the systemic risk that forced federal regulators to inject trillions of dollars into the financial markets to keep them from collapsing was caused by repos and credit default swaps. Now it appears the … Continue reading

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Economists: Repos underlie financial crisis in Europe

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The financial crisis in Europe grows out of banks’ excessive use of repos and their assumption that government officials will not let the repurchase market fail, according to a July 2011 report by two economists. In “Europe on the Brink,” economists Peter Boone and Simon … Continue reading

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The repurchase market has become Too Big To Fail

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Commentary From the editor: Have the U.S. and Europe reached the point where borrowers can not be allowed to default on their debt, and their lenders or investors can’t be forced to eat any losses, if financial institutions are widely using the debt as collateral … Continue reading