Mark Thoma Praises the New York Fed's Expansion of Its LOLR Role
Mark Thoma:
Economist's View: "NY Fed to Take More Direct Role in Repo Market": I've complained many times that the risk of non-traditional bank runs in the repo market, a key factor in the financial crisis, is still present. As noted below in a quote from the NY Fed, the "systemic risk associated with this market remains unchanged." So it's good to see that the NY Fed is finally stepping in with oversight of this market after it waited for the industry to fix itself, and that didn't happen. But why did anyone think the industry would fix itself in the first place?
