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As dollar woes get worse, why don't the Fed's swap lines work? Let's answer that question.

Eurodollar University

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The Fed's Programs Didn't Work in June 2008

In June 2008, there was no Basel III. There were also no HQLA or SLR. Banks could still prop trade. It should have been obvious that gross illiquidity had led to the demise of Bear Stearns and several other high profile Carlyle banks. The Fed thought Bear Stearn represented a victory. But it's really an isolated case of not offering money to the entire marketplace that might be needed.

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