Financial Stability News

News about financial stability and central banking

Repo Market Reform

NY Fed just released summary of conference dealing with repo market reform. Presentations are posted on their web site. See Acharya’s presentation form the summary session; he proposes a new form of MMLR, that could handle runs in the repo market. Other participants discussed the “safe harbour privilege” for repos and derivatives, arguing that … recent extensions of the “safe harbor privilege,” which gives favorable treatment to some financial contracts in bankruptcy, may have gone too far and could have contributed to financial instability.

 

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