Central banks

Interested to read in Tuesday's pink'un of something called the tri-party repo market. A wheeze whereby big banks buy Treasury bonds on credit from a third party, which they then pay back a day or so later when they sell the bonds on. The catch seems to be that there is now just one such third party in the all important US market, BNY Mellon.

The tri-party repo market is a very large market in terms of the amount of money involved, so one presumes that the BNY Mellon themselves are very credit worthy, with lots of people willing and able to provide the necessary finance. At least for now.

Now you can't nationalize the operation (and the risks involved) because that is what commies do. Which leaves you with a problem, were BNY Mellon ever to get into trouble or to want to pull out.

A nice example of how private interests and operations get all muddled up with public interests and operations at the very top of the finance tree. Something last noticed back in July, at reference 3.

Reference 1: https://www.bnymellon.com/emea/en/home.jsp. 'At BNY Mellon, Alexander Hamilton’s genius is our legacy. His foresight and ability to act upon his visionary thinking set him apart from his peers. One of his many achievements was founding The Bank of New York, now BNY Mellon, in 1784'. So just about a hundred years younger than our own Bank of England, founded in 1694.

Reference 2: https://www.bnymellon.com/us/en/search.jsp?q=third%20party%20repurchases. So a website which knows all about third party repo - not that I have actually read any of it - resting content with the snap of the top of the 1,351 results included above.

Reference 3: https://psmv4.blogspot.com/2019/07/another-take-on-world-of-finance.html.