Journal ArticleDOI
The (impossible) repo trinity: The political economy of repo markets
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The concept of the "repo trinity" was introduced by as mentioned in this paper, which captures a set of policy objectives that central banks outlined after the 1998 Russian crisis, the first systemic crisis of collateral-based finance, connecting financial stability with liquid government bond markets and free repo markets.Abstract:
In its capacity as debt issuer, the state has played a growing role in financial life over the last 30 years. To examine this role and connect it to shadow banking, the paper develops the concept of the ‘repo trinity’, which captures a set of policy objectives that central banks outlined after the 1998 Russian crisis, the first systemic crisis of collateral-based finance. The repo trinity connected financial stability with liquid government bond markets and free repo markets. It further reinforced the dominance of the US government bond market as institutional template for states adjusting to a world of independent central banks, market-based financing and global competition for liquidity. Central banks and the Financial Stability Board recognized the impossible nature of the trinity after 2008, attributing cyclical leverage (financial instability) and elusive liquidity in collateral markets to deregulated repo markets, markets systemic to shadow banking. The new approach triggered radical changes in crisis central banking but has not powered significant regulatory interventions in the absence of an alternative mode of organizing government bond markets.read more
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Playing the Market: A Political Strategy for Uniting Europe, 1985–2005 -
TL;DR: Jabko as mentioned in this paper presents a political strategy for uniting Europe, playing the market, 1985-2005. But it is not a political game, it is an economic game.
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Central banking and the infrastructural power of finance: the case of ECB support for repo and securitization markets
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Black Swans, Lame Ducks, and the mystery of IPE's missing macroeconomy
Mark Blyth,Matthias Matthijs +1 more
TL;DR: The authors argue that IPE needs to shift its focus from micro-foundations back to macro-effects, such as recurring financial bubbles, increasing levels of inequality, and the global rise of populism.
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Governing through financial markets: Towards a critical political economy of Capital Markets Union:
TL;DR: The Capital Markets Union (CME) is a large-scale political project to strengthen and further integrate European market-based finance as discussed by the authors, which is an initiative of the European Commission under Jean-Claude Juncker's lead.
References
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Journal ArticleDOI
Policy paradigms, social learning, and the state: the case of economic policymaking in Britain
TL;DR: The authors examined the role of ideas in policy making, based on the concept of policy paradigms, and found that a conventional model of social learning fit some types of changes in policy well but not the movement from Keynesian to monetarist modes of policymaking.
Posted Content
Market liquidity and funding liquidity
TL;DR: In this article, the authors provide a model that links an asset's market liquidity and traders' funding liquidity, i.e., the ease with which they can obtain funding, to explain the empirically documented features that market liquidity can suddenly dry up, has commonality across securities, is related to volatility, is subject to flight to quality, and comoves with the market.
Journal ArticleDOI
Market Liquidity and Funding Liquidity
TL;DR: In this article, the authors provide a model that links a security's market liquidity and traders' funding liquidity, i.e., their availability of funds, to explain the empirically documented features that market liquidity can suddenly dry up (i) is fragile), (ii) has commonality across securities, (iii) is related to volatility, and (iv) experiences “flight to liquidity” events.
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Liquidity and Leverage
Tobias Adrian,Hyun Song Shin +1 more
TL;DR: In a financial system in which balance sheets are continuously marked to market, asset price changes appear immediately as changes in net worth, eliciting responses from financial intermediaries who adjust the size of their balance sheets as mentioned in this paper.
Journal ArticleDOI
Liquidity and Leverage
Tobias Adrian,Hyun Song Shin +1 more
TL;DR: In this article, the authors show that marked-to-market lever-age is strongly procyclical and that changes in aggregate balance sheets for intermediaries forecast changes in risk appetite in financial markets, as measured by the innovations in the VIX index.