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Hi everyone,
I'm having some trouble with an assignment containing an economics issue and was hoping you could help.
The problem:
I'm working on a shadow banking assignment, specifically related to the issue of margin/haircuts in collateralised finance transactions (derivatives, repos, securities lending). I need to write a section on "the economics of the debt markets" that specifically relates to the aforementioned.
What I think:
I think this relates to various things:
1. The supply and demand for shadow banking services as it undercuts traditional banking
2. Collateral Intermediation i.e. collateral velocity, (re-use/re-hypothecation of collateral).
3. Economic functions: Hedging, financing, price discovery and liquidity
Any help would be greatly appreciated.
Thanks in advance.
Mr Kipling
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