Repo is Far from "Unregulated"

Repo is very much in the news lately, even coming up on the radar screen of the New York Times' Gretchen Morgenson. Morgenson penned an article in the Times' September 14, 2013 issue, After a Financial Flood, Pipes Are Still Broken, in which she worries that despite new rules on derivatives, the repo market remains largely unregulated.

And yet, for all the new regulations governing derivatives, mortgages and bank holding companies, a crucial vulnerability remains. It’s found in our vast and opaque securities financing system, known as the repurchase obligation or repo market. Now $4.6 trillion in size, it is where almost every financial crisis since the 1980s has begun. Little has been done, however, to reduce its risks. Morgenson indulges in some journalistic hyperbole to make her point, but she is not the only one concerned about the risks associated with the wholesale funding market.

Tuesday, October 1, 2013/Author: David Schwartz J.D. CPA/Number of views (16206)/Comments (0)/
Tags: Repo