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Consider OTC derivatives We're Looking at a System-Wide Margin Call

The worst scramble for cash is happening in an opaque corner of the market that the Fed can’t control.

Consider OTC derivatives, which are mostly betting slips on the future movements of interest rates and currencies.

More than a decade ago, the scramble for cash wiped out as much as $36 trillion, or more than half of the market value of global equities. 

So far, the coronavirus has cost global stocks about $26 trillion, or roughly 30% of their market value, from their late-February peak. 

So you could argue there’s a long way to go.

Bloomberg 24 March 2020

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