Category Archives: Federal Reserve

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The Panic of 2007-8: What happened?

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Ten years after the Panic of 2007-8, there’s still major disagreement about what caused the financial crisis and the Great Recession. That’s the sobering revelation in a flurry of commentary written for the 10th anniversary of the Lehman bankruptcy. Lehman … Continue reading

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Bring back our crisis tools

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Editor’s Note:  The following opinion column was published today in my local newspaper, the Santa Rosa (Calif.) Press Democrat. See original column here.  Thanks.   -Mary Fricker By Mary Fricker To prevent the next financial crisis from being worse than the … Continue reading

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2016 news round-up: So little has changed

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The biggest news about the repurchase market in 2016 was how little has changed since 2008. A year ago, the future looked brighter. 2015 was a hopeful year for people who want to see a solution to the risks that … Continue reading

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Unfinished business: Banking in the shadows

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Paul Volcker gets it. Will anyone listen? Here’s what he wants Americans to know: The main danger in the financial markets is not banks getting too big. The main danger in the financial markets is non-banks borrowing short to lend … Continue reading

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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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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

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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

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NY Fed chief lays it on the line, for bankers and for the rest of us

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It felt like “The Gunfight at the O.K. Corral.” First to appear was departing Treasury Secretary Timothy Geithner, who told Wall Street Journal economics editor David Wessel in a wide-ranging exit interview January 17 that the financial markets are much … Continue reading

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Economists and other analysts see value, danger in repo and shadow banking, urge reform

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Latest update: October 2, 2012 In recent months economists and other experts have published a torrent of reports on repo and shadow banking, noting their importance and their dangers and urging reform. Following are 74 of the reports, arranged chronologically … Continue reading

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The Federal Reserve’s century-long affair with repos

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Latest update: August 4, 2013 The Federal Reserve and the repurchase market are intimate partners in the financial system that delivers credit throughout the U.S. economy. For almost 100 years, they have relied on each other to help reach their … Continue reading

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News round-up: Repo and shadow banking A to Z

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RepoWatch recommends the following reports. Search for the topics that interest you: DataWatch, Financial crisis, Finding a fix, Hedge funds, Regulation, Repurchase market, Securities lending, Securitization, Shadow banking, Too big to fail, and Tri-party repo. Items are arranged chronologically, within … Continue reading

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Part 1: Tri-party repo’s problems are deep and unresolved

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The tri-party repurchase market is more vulnerable to panic and abuse and further from being fixed than has previously been understood, based on recent reports. This matters, because tri-party was the chief trouble spot in the financial markets in 2007 … Continue reading

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Top dealers to Fed: Flow of credit continues to slow

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Credit in key areas of the repurchase market continued to tighten in the fourth quarter, according to the Federal Reserve’s quarterly survey of senior credit managers at 20 leading Wall Street dealers. The finding furthers a trend that the Fed reseachers … Continue reading

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Keep an eye on this quarterly Fed study of repos

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A shortgage of trusted repo collateral is slowing the flow of credit in the U.S. and in Europe, and that trend is showing up in a survey of the repo market now being conducted quarterly by the Federal Reserve. Spotting … Continue reading

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MF Global warning: Financial markets have not been fixed

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The October 31 bankruptcy of MF Global Holdings Ltd., a broker-dealer on Fifth Avenue in New York City, is important news for all Americans because it is a warning: The Dodd-Frank Act, which Congress passed 16 months ago to protect Americans … Continue reading

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Regulators talk tough about tri-party reform

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If the industry task force working to make the tri-party repurchase market more stable in a crisis won’t do the job, regulators may have to do it for them. That tough warning comes from William Dudley, president of the Federal … Continue reading

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Bloomberg details Fed’s three-year bailout frenzy

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Bloomberg News has given us a stunning picture of the frantic efforts by the Federal Reserve to save the credit markets between August 2007 and April 2010. The report doesn’t mention the R-word (repo), even though fear for the repurchase … Continue reading