Scott E.D. Skyrm � April Collateral Shortage – Preview

Scott E.D. Skyrm � April Collateral Shortage – Preview: There was a severe shortage of quality AAA collateral in 1997 to 2000 when the government ran surpluses. A balanced budget for a long time would force the repo market to use collateral that was likely compromised and not pristine AAA collateral. With the need for collateral for interest rate swaps, balancing the budget of the US government is not really a good idea.

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