Behind the Money
A radical change for the US Treasury market
Mar 27, 2024
Exploring the recent crises in the US Treasury market, the significant reform introduced by the SEC, and the potential pitfalls and promise that come with it. Discussing the impact of leverage, the role of clearing houses, and industry preparations for handling new business regulations.
15:40
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Quick takeaways
- The US Treasury market faced crises prompting regulators to enact reforms for market stability and integrity.
- Market growth poses risks due to increased leverage and shifting participant dynamics, leading to reduced liquidity and price fluctuations.
Deep dives
The Significance of the US Treasuries Market
The US Treasuries market is compared to the vast, influential ocean due to its size and global impact. It is the largest and most liquid market globally, held by various investors worldwide, including foreign central banks and governments. The market plays a crucial role in executing monetary policy and maintaining stability. However, during crises like in March 2020, unexpected events can lead to turbulence affecting not only the bond market but also causing ripple effects in other financial sectors.
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