shadow banking as well as tax and legal havens. “shadow banks,” now have $52 trillion in assets, a 75% … of the financial crisis when the subprime mortgage market collapsed.
Another look at the Federal Reserve’s panic in September 2019 and solutions to the crisis
You may recall that from 17 September 2019, the United States Federal Reserve injected massive amounts of liquidity into banks due to a quite abnormal situation on the repo market . The repo market designates a mechanism used by banks to obtain short-term financing. They sell securities they hold in repurchase agreements (repo). For example they place US Treasury bonds or Triple-A company securities in repo overnight, to serve as warranty or collateral for the loan they are making, and they buy them back on the following day. In exchange for these securities, they obtain cash at a rate of interest close or equal to the policy interest rate fixed by the Fed which is close to 2% (see the video on the financial channel CNBC: https://www.cnbc.com/video/2019/10/04/what-it-means-when-the-fed-conducts-a-repo-operation.html ).
The $1 trillion “repo market” allows banks and other financial institutions to borrow and lend from one Another
You are seriously dropping knowledge for ALL to understand!!
Also consider that a derivative or a credit account on the balance sheet can be seen as an asset and a liability in either side, all that without a real transaction of cash. Which means balance sheets can grow indefinitely as long as at some point in the web of these balance sheets actual cash is exchanged for some part of these assets. Since those assets have to be exchanged for cash at some point of the cycle, an opportunity is created when new cash is needed, if just before this cash is needed new credit stops, a significant slice of the GDP disappears making asset prices drop, and right after the newly created cash, credit can be redistributed to credit worthy clients, making these new cash pay for more assets than just creating the cash before stopping credit, allowing for the consolidation of corporations and the forced sale of assets. That’s what has happened for the last 40 years, but now conglomerates manage and accumulate cash instead of creating it in the moment of the asset prices drop, now central banks create this cash continuously (QE) wonder why that is? I don’t know. Ideas? Are they afraid people will do something this time because more and more people understand this?
“Who stole my pension?”