Thursday, Dec 11, 2008
'Novel' is good, right?
Bloomberg: Treasury Studying ‘Novel Approaches’ to Sell Debt
Treasuries are in such high demand that investors are lending cash for next to nothing to obtain the securities as collateral through so-called repos, which dealers use to finance their holdings. The problem is many parties involved in the repurchase agreements aren’t delivering the bonds because there is no penalty for not doing so, causing “fails” to exceed $5 trillion in the week ended Oct. 22, according to the Federal Reserve Bank of New York.
Posted by gardeniadotnet @ 10:03 AM (232 views) Add Comment
1 Comment
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1. 51ck-6-51x said...
There are proposals in the pipeline to reduce the fail rate, see:
http://www.housepricecrash.co.uk/newsblog/2008/11/blog-fixing-up-the-us-t-bill-repo-market-19360.php