In this issue of Monetary Mechanics, I am going to do a deep dive into a topic that I have already alluded to in previous issues of Monetary Mechanics: collateral transformation. Collateral transformation is an important issue, one that has become more and more relevant over the past decade, as various post-GFC legislations and regulations intended to safeguard the financial system have increased demands on the existing stock of high-quality liquid assets that are suitable as collateral.
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Issue #32: Collateral Transformation
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In this issue of Monetary Mechanics, I am going to do a deep dive into a topic that I have already alluded to in previous issues of Monetary Mechanics: collateral transformation. Collateral transformation is an important issue, one that has become more and more relevant over the past decade, as various post-GFC legislations and regulations intended to safeguard the financial system have increased demands on the existing stock of high-quality liquid assets that are suitable as collateral.