According to this article, it's worse than that, we're lending money not to banks, but to hedge funds, PE firms, and REITs: https://wolfstreet.com/2019/11/06/wh

According to this article, it's worse than that, we're lending money not to banks, but to hedge funds, PE firms, and REITs: https://wolfstreet.com/2019/11/06/whats-behind-the-feds-bailout-of-the-repo-market/ https://wolfstreet.com/2019/11/06/whats-behind-the-feds-bail... These firms than use the cheap money (interest rate < 3%) to make leveraged bets on risky assets (mortgage backed securities, CMOs, etc).