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“It’s starving us out.” “It’s squeezing us dry.” “It just doesn’t understand our problems.” This is what you’ll hear if you ask the average German repo-trader what he thinks of the central bank. Next will come the wistful remark: “This market could easily be three times as big.” What so incenses these traders is the Bundesbank’s insistence that repos be subject to the same minimum-reserve requirements as sight demand deposits. In any country, a repo involves an agreement to sell securities immediately and repurchase them later. |
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