There is no shortage of liquidity in the repo market.

1. On today's earnings call, Jamie Dimon, JPM's Chairman and CEO, explained why the repo rate spiked in Q3 2019. He stated that JPM has a checking account at the Fed. The balance of that checking account is about $120B. Other banks have required reserves at the Fed too. The balance may drop to half of $120B, but unlike prior financial crisis, it can't go below zero. When the repo market was in shortage of USD and the rate spiked to 10%, JPM and other big banks' reserves and liquidity are ample. However, they couldn't enter the repo market due to the regulatory limits. For example, liquidity coverge ratio. 

In Q42018,  JPM flooded the repo market with liquidity, when the regulatory limit was not breached. 

In conclusion, Jamie Dimon reaffirmed that there is no shortage of liquidity in the market. 

 

 

所有跟帖： 

• An analyst asked him the question: why -autumnjune- ♀ (515 bytes) () 10/15/2019 postreply 21:57:15