Repo blowup was fueled by big banks and hedge funds, BIS says

American Banker/12-9-2019

graphic image logo for Bank for International Settlements“The September mayhem in the U.S. repo market suggests there’s a structural problem in this vital corner of finance and the incident wasn’t just a temporary hiccup, according to a new analysis from the Bank for International Settlements.”

USAGOLD note:  Another report on the repo market that attempts to explain why it happened.  The BIS position that the problem is structural and not a temporary phenomenon comes as a surprise.  Now the question becomes how long will the Fed need to provide “temporary liquidity” to a problem that the BIS calls “structural.”  Thus far, the gold market’s reaction has been muted.  We may learn more later today when the Fed chairman holds his press conference.


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