Uncertainty, Liquidity Hoarding, and Financial Crises

Analysis from Liberty Street Economics Tanju Yorulmazer, Federal Reserve Bank of New York One of the most interesting phenomena marking the recent financial crisis was the disruptions in the interbank market, where banks borrow and lend reserves to each other. This post draws upon my paper with Douglas Gale, “Liquidity Hoarding,” to discuss this practice …

JP Morgan Markets Its Latest Doomsday Machine

The intricacies of repo, haircuts, hypothecation and other arcane financial engineering are discussed and the ongoing threat to financial stability explained. The terminology of the explanation includes terms such as “Doomsday Machine” and “Dragon”. And the terminology may be too mild.