Pat Parkinson on the 2020 Treasury Market Meltdown and How to Avoid a Potential Sequel

Pat Parkinson is a senior fellow at the Bank Policy Institute and a 30-year veteran of the Federal Reserve system, where he served as director of the Division of Banking Supervision and Regulation. During that time, he was also a member of the Basel Committee on Banking and advised Alan Greenspan, Ben Bernanke, and Tim Geithner on financial market issues. Pat joins Macro Musings to discuss the treasury market meltdown in March 2020, as well as what we can do moving forward to avoid this issue from happening again. Specifically, David and Pat outline the implementation of a standing repo facility, changes to the supplemental leverage ratio, expanded central clearing, and increased data collection as possible solutions to this problem.  

 

Transcript for the episode can be found here.

 

Pat’s BPI profile: https://bpi.com/people/pat-parkinson/

 

Related Links:

 

*Enhancing Liquidity of the U.S. Treasury Market Under Stress* by Nellie Liang and Pat Parkinson

https://www.brookings.edu/research/enhancing-liquidity-of-the-u-s-treasury-market-under-stress/

 

*US Treasuries: The Lessons from March’s Market Meltdown* by Colby Smith and Robin Wigglesworth

https://www.ft.com/content/ea6f3104-eeec-466a-a082-76ae78d430fd

 

David’s blog: macromarketmusings.blogspot.com

David’s Twitter: @DavidBeckworth