… at the largest US banks, something we addressed previously when we discussed how JPMorgan gamed the financial system to trigger “NOT QE”, and a topic that Bloomberg touches on overnight in “Repo Firepower Reduced by Falling Cash Levels at Big U.S. Banks.”
As Pozsar cautions, the core problem at the heart of the repo blockage is that as banks shifted from owning reserves to collateral (mostly Treasuries), for reasons we will address shortly, large U.S. banks like J.P. Morgan that are central to year-end flows spent some $350 billion of excess reserves on collateral since the beginning of the Fed’s balance sheet taper, leaving banks (and especially JPMorgan) dangerously low on reserves.
How & Why Central Banks are Preparing for the Crash
Take a seat and don’t hold your breath !
BTW, there are only 4 big banks in America then only 50% are in problem , let guess the overseas are German DB and biggest France or Italy bank !
Good Enough for a meltdown !!
h/t TIO JUAN