Leave it like this and bonds can't be delivered on settlement day. No one will be able to source them, and the whole bond market will be dragged into chaos and grind to a halt. We have to correct the distortion this short squeeze has caused, right now. (N1 lesson 23)
Exactly. Unable to find a safe place to invest, regional banks leave the money deposited in their current accounts with us, and that pooling has become entrenched. Left as it is, low rates will clearly weaken the regional banks' earning power and sap local communities of their vitality. We urgently need to design new lending incentives to break the deadlock. (N1 lesson 51)
Yes. With hedge ratios plunging, the soaring cost of buying fuel and food is hitting companies' earnings directly, and firms gasping under badly worsening profitability are crying out. If passing the costs on to consumers can't keep up, company after company could end up running out of cash. There is no more time to spare. (N1 lesson 76)
Yes. The simulation model also shows that, as a result, the market's liquidity is sucked out all at once, and the whole settlement system ends up in a ruinous breakdown: a cascading freeze. (N1 lesson 132)
Unless we cut the excessive interdependence between the state's finances and the banking sector, the nation's finances and the financial system will end up facing collapse together. (N1 lesson 105)
