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Countering Wall Street’s Latest Baseless Attack Against Financial Protection Rules

Op Ed and Fact Sheet | Op Ed (Bloomberg): “Don’t Use Repo Volatility as a Reason to Roll Back Bank Regulations” (Effective Standards Aren’t Causing the Turmoil Despite Claims to the Contrary) and Fact Sheet: “Report Market: Reality vs. Wall Street Claims


 

Last September, rates in the repo markets spiked, and the biggest Wall Street banks and their allies – consistent with past practice – predictably claimed that the financial protection rules adopted since the catastrophic 2008 crash caused the repo turmoil.  Some thought another spike, if not crash, would happen at year end.  We did not and said so in our Op Ed.  Year end was quiet, but the Fed’s massive injections of liquidity into the repo markets, which began last September, has continued at a very significant level, once again ballooning the Fed’s balance sheet.  This raises a number of policy questions, which we addressed in our Fact Sheet.  These issues are likely to continue throughout 2020 and we will continue to counter the industry’s attempts to attack the rules without basis.

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