Nick argues on bank reserves that “The reason for those reserves being there in the first place; as a consequence of liquidity and stress-test regulations which are driven by the need to ensure banks can meet liabilities as they fall due during a crisis.”
Nick also declares that while reserves remain high “In the meantime customers’ short-term deposits continue to be driven away from the banks, creating a risk transference; with more funds flowing into not-so-well-regulated shadow banking sectors. As such we are probably creating a whole new unregulated global loan position, without yet fully addressing the previous crisis.”
To read the feature in the Financial Times in full please click here (website subscription required)
Nick also recently featured in FX-MM on the topic of collateral management. To read that article in full please click here
