Repo markets lack state insurance guarantees, making them run-prone

Evidence

If anything, it’s the absence of the state in the repo markets that’s worth commenting upon, since the absence of the state’s guarantee of insurance explains the system’s vulnerability to a bank run. — Mark Blyth, Austerity, 704

Categorization

• XREF: Connects to Mattei’s account of austerity and financial crisis, and to the broader literature on shadow banking’s fragility requiring state backstops. — connects to: Contractual trust fails where state enforcement is sporadic

Broader Connections

• Contractual trust fails where state enforcement is sporadic #corroborates (0.80)