Repo-calypse: No, Jamie, It Wasn’t The SLR!
- Repo-calypse: No, Jamie, It Wasn’t The SLR!
by Jeffrey Snider via Alhambra Investment Partners, via https://www.zerohedge.com/
JP Morgan’s CEO Jamie Dimon has been running around Washington claiming that mid-September’s repo rumble was the result of the post-crisis regulatory environment. He now says that his bank had the spare cash and was willing to cash in on double digit repo rates but it was government rules which prevented that from happening. It’s unclear (but we can, and I will, guess) why he didn’t make the same claim and warn everyone on Friday, September 13, before the seasonal low point in liquidity that everyone knew was there.
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It wasn’t until quite a while afterward during that period when a stunned financial world was still trying (and failing) to make sense of what had happened.
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You probably won’t be surprised to learn that this isn’t the first time Wall Street has complained about these very same regulations. They’ve been against them from the very beginning. What’s different now is that they have a very public event about which nobody has any real answers to rally support. It all sounds pretty plausible (it always sounds plausible, yet never explains most of the facts).
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To sum up: Wall Street has hated almost every single post-crisis regulation that has been implemented, though in some cases they’ve been right to do so. However, there is absolutely no reason to believe that the e-SLR or G-SIB rules had anything to do with the repo market outbreak in September 2019.
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