Repo & Reform Ignored at Our Peril

“Financial stability requires a massive reversal in financial regulatory policy as it has been adopted since the 1990s. The regulators got it completely wrong and have transformed finance into a house of cards because it is built on repo contracts.” —Carolyn Sissoko, economist at University of the West of England on Twitter November 3, 2021

Think of the implications of the above quote, “A massive reversal in financial regulatory policy.” Does it not strike you as odd that despite this dire proclamation there have been no steps taken to address the inherent risk posed by the global financial markets? No hearings on Capitol Hill, no substantive newspaper series on the out-of-control shadow banking system. Nothing.

It is not for lack of trying. In 2016 the U.S. Chamber of Commerce published a paper, “Restarting the Growth Engine: A Plan to Reform America’s Capital Markets.” Included in it was the recommendation to create a President’s Commission on Financial Regulatory Restructuring.” Never happened. Googling the name, I stumbled upon a “President’s Commission on Financial Structure and Regulation.” Created in 1970 this commission was cited on Wikipedia as one that “heralded the trend toward deregulation that predominated for four decades.” Not what the Chamber had in mind. Others too, have put forth well-thought-out workable solutions toward averting another crisis.

Read about them in my book,“Repo Madness: A Simpleton’s Guide to the Street’s Wicked Ways," and understand why they have never seen the light of day. ?It is available on?Amazon?and?Barnes & Noble.