Post-crisis regulation of derivatives and bank capital have had some unintended consequences for short-term interest rates and market imbalances, research published by the Bank of England finds.
The authors of the staff working paper study how the European Market Infrastructure Regulation and Basel III impact repo markets, which they note have replaced unsecured lending as the most important source of liquidity in the financial sector.
Angelo Ranaldo, Patrick Schaffner and Michalis Vasios use
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