Repo markets could face repricing chaos

Jul 28, 2011

The huge but poorly understood repurchase-loan market is the oil that greases the banking system, and a US default or even a downgrade would affect liquidity, but no one knows to what extent.

If the United States commits hari-kari next week and defaults on its debt, whatever market mayhem ensues will affect the $10 trillion repurchase-loan market.

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