Brumm, Johannes; Grill, Michael; Kubler, Felix; … - 2018
We assess the quantitative implications of collateral re-use on leverage, volatility, and welfare within an infinite … tighter, yet the impact on welfare is non-monotone. In the model, allowing for some re-use can improve welfare as it enables … lower welfare. So the analysis in this paper provides a rationale for limiting, yet not banning, re-use in financial markets. …