The repo market disruption: What happened, why, and should something be done about it?
Past Event
Introduction & What happened?
In September, a disruption in the market in which banks and others lend and borrow for very short periods of time, the repo market, led to a sharp spike in short-term interest rates and prompted the Federal Reserve to inject tens of billions of dollars of reserves into the markets. The episode has given rise to questions about the Fed’s new operating framework for influencing interest rates and about possible unintended consequences of regulations imposed after the global financial crisis to make sure banks have enough liquidity to handle another crisis. JP Morgan Chase CEO Jamie Dimon suggests that resolution-and-recovery liquidity stress tests may need to be re-calibrated. U.S. Treasury Secretary Steve Mnuchin says it may make sense for regulators to examine intra-day liquidity rules. Senator Elizabeth Warren (D-Mass.) says she suspects that banks are using the episode to ease liquidity requirements they have long disliked.
On Thursday, December 5, the Hutchins Center on Fiscal and Monetary Policy at Brookings sought to answer questions on what happened in the repo markets in September and why — and what, if anything, the Fed or other regulators should do about it.
Agenda
Introduction
Nellie Liang
Undersecretary for Domestic Finance - United States Department of the Treasury
Former Senior Fellow - Economic Studies
Session Materials
What happened?
Patricia Mosser
Senior Research Scholar of International & Public Affairs - Columbia University
Director, MPA Program in Economic Policy Management - Columbia University
Jerome Schneider
Head of Short-Term Portfolio Management - PIMCO
Session Materials
What are the big questions that we need to answer?
Daniel K. Tarullo
Nonresident Senior Fellow - Economic Studies, The Hutchins Center on Fiscal and Monetary Policy
Session Materials
Discussion
Patricia Mosser
Senior Research Scholar of International & Public Affairs - Columbia University
Director, MPA Program in Economic Policy Management - Columbia University
Daniel K. Tarullo
Nonresident Senior Fellow - Economic Studies, The Hutchins Center on Fiscal and Monetary Policy
Jerome Schneider
Head of Short-Term Portfolio Management - PIMCO
David Wessel
Director - The Hutchins Center on Fiscal and Monetary Policy
Senior Fellow - Economic Studies
What role does the Federal Reserve operating framework play?
William B. English
Professor in the Practice of Finance - Yale School of Management
Former Director of Division of Monetary Affairs - Federal Reserve
Bill Nelson
Chief Economist - Bank Policy Institute
Session Materials
What role does regulation play?
Sean Campbell
Executive Vice President, Director of Policy Research - Financial Services Forum
Tim P. Clark
Distinguished Senior Banking Adviser - Better Markets
Sandie O’Connor
former Chief Regulatory Affairs Officer - JP Morgan Chase & Co.
Jim Wigand
Great Point Financial, LLC
Nellie Liang
Undersecretary for Domestic Finance - United States Department of the Treasury
Former Senior Fellow - Economic Studies
More Information
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