The reason why we start to see problems in the repo market is clear: the FED is paying banks to keep their money in a safe place, being rewarded for taking no r

The reason why we start to see problems in the repo market is clear: the FED is paying banks to keep their money in a safe place, being rewarded for taking no risk! Why would a bank ever lend money to others if they see any problem whatsoever appearing in the horizon? In the next recession, you will see that ALL banks will stop lending to each other and let their excess reserves safe and sound receiving interest for doing nothing. The FED has created the very conditions for a sure repetition of what happened in 2008.