This paper presents a model of an over-the-counter bond market in which bond dealers and cash investors arrange repurchase agreements (repos) endogenously. If cash investors buy bonds to store their cash, then they suffer an endogenous bond-liquidation cost because they must sell their bonds...

The author introduces a central counterparty (CCP) into a model of a repo market. Without the CCP, there exist multiple equilibria in the model. In one of the equilibria, a repo market emerges as bond dealers and cash investors choose to arrange repos in an over-the-counter bond market. In...

Chapter 1: Introduction -- Part 1: The Regulation of Cross-Border Finance -- Chapter 2: Financial Regulation and Systemic risk -- Chapter 3: The Regulation of Globalized Finance -- Part 2: Cross-Border Regulation in the EU: The Passport and the Equivalence Regime -- Chapter 4: The Passport...

In the wake of the recent financial crisis, over-the-counter (OTC) derivatives have been blamed for increasing systemic risk. Although OTC derivatives were not a central cause of the crisis, the complexity and limited transparency of the market reinforced the potential for excessive risk-taking,...