This financial system is light years away from the postwar model, where banks borrowed from retail depositors and lent to individuals and companies.

The chief source of funds is not deposits but repurchase agreements or repos, a form of borrowing that has to be backed by collateral in the form of “safe” assets such as government bonds.

 About Capital Wars: The Rise of Global Liquidity, by Michael Howell

 John Plender FT 13 July 2020

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