That’s only one consequence of the regulations taken after 2008 (the leverage capital requirements forcing banks to shrink their repo book, reducing liquidity i

That’s only one consequence of the regulations taken after 2008 (the leverage capital requirements forcing banks to shrink their repo book, reducing liquidity in the repo market). Tighter rules on capital requirements for holding many other asset classes, bonds in particular will also reduce a lot the capacity of banks to make a market for these instruments in bad times, resulting in more volatility. None of that is new, banks have been warning about that for years. But it will only become visible in a sharp market downturn.