Re: Bernanke missing the point on repo

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(email exchange)

The Fed already has thousands of designated agents, the banks, to lend and take in deposits.

If I were in charge I’d eliminate the cap on FDIC insured bank deposits and legislate any insured pension funds keep their excess cash in insured deposits.

And borrowers can go to the banks as well.

And if I wanted spreads narrower that could also be done via adjusting capital requirements and risk weights as desired.

>   On Tue, Mar 10, 2009 at 10:00 AM, Pat wrote:
>   Bernanke is lending credence to our idea of a centralized, regulated exchange for repo which
>   we have been calling the RPX project.

Chairman Ben S. Bernanke — At the Council on Foreign Relations, Washington, D.C.

Mar 10 (Federal Reserve) — The Federal Reserve and other authorities also are focusing on enhancing the resilience of the triparty repurchase agreement (repo) market, in which the primary dealers and other major banks and broker-dealers obtain very large amounts of secured financing from money market mutual funds and other short-term, risk-averse sources of funding.