Episode Details

The Financial Stability Board (FSB) released a report in February 2026 that outlines three vulnerabilities in government bond-backed Repo Markets. The interlinked potential sources of structural vulnerabilities include 1) Repo Markets can facilitate a build-up of leverage, 2) Demand and supply imbalances in Repo Markets can arise quickly in stress periods, and 3) Repo Markets are highly concentrated along various dimensions. This report is excellent, providing background on Repo Markets, how they work, structural vulnerabilities, interlinkages, and potential contagion. Repo Markets play a critical role in facilitating the flow of cash and securities throughout the financial system. A link to the report is included below.   

Link: Vulnerabilities in Government Bond-backed Repo Markets