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Repo Madness—A Deep Dive Into Why It Happened

Summary:
These days banks have a larger percentage of their funding borrowed in the term markets by issuing CDs, medium-term notes, and even bonds. Since banks manage their tenure mismatch much better, they are not as susceptible to the classic “run on the bank.” However, in recent years, new categories of financial institutions have popped-up that are more susceptible to “bank runs.” https://www.zerohedge.com/markets/panic-repo-one-worlds-top-repo-experts-explains-what-really-happened

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These days banks have a larger percentage of their funding borrowed in the term markets by issuing CDs, medium-term notes, and even bonds. Since banks manage their tenure mismatch much better, they are not as susceptible to the classic “run on the bank.” However, in recent years, new categories of financial institutions have popped-up that are more susceptible to “bank runs.”

https://www.zerohedge.com/markets/panic-repo-one-worlds-top-repo-experts-explains-what-really-happened

 

David Stockman
David Alan Stockman (born November 10, 1946) is a former businessman and U.S. politician who served as a Republican U.S. Representative from the state of Michigan (1977–1981) and as the Director of the Office of Management and Budget (1981–1985) under President Ronald Reagan.

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