Council of Councils
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Introduction
Over the last several decades, governments have collectively pledged to slow global warming. But despite intensified diplomacy, the world is already facing the consequences of climate…
Prime Brokers and Derivatives Dealers
April 7, 2010
- Report
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Overview
Runs by prime-brokerage clients and derivatives counterparties were a central cause of the global financial crisis. These runs precipitated the failures of Bear Stearns and Lehman Brothers by substantially reducing the broker’s liquidity. This Working Paper, the ninth in the Squam Lake series distributed by the Greenberg Center for Geoeconomic Studies, argues for higher regulatory liquidity requirements for dealer banks that use assets of clients and counterparties as a source of liquidity.
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