The Advantages and Disadvantages of Secured Financing Transactions

There's always, banks have quite a lot of alternatives to manage both the asset side of their balance sheet, as well as the liability side. Secured financing transactions are a method of liability management. And it's an effective one. So individual banks will make individual choices based on whatever liquidity parameters they're facing with. Sometimes that means you want to hold central bank reserves in the pre-crisis era where reserves were restricted and there weren't a lot of them. There really isn't because everybody has access to central bank reserves or some way to get them.

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