Manmohan Singh in the FT: Collateral Velocity is Rebounding

In this guest post, Manmohan Singh updates the collateral reuse metric and shows that collateral velocity is rebounding. Singh is the author of Collateral and Financial Plumbing, a senior economist at the IMF, and a fellow at Georgetown University. All views expressed are of the authors only, and do not necessarily represent the views of the IMF, or its executive board, or management.

As background, before the financial crisis, the use (and reuse) of pledged collateral was comparable with the velocity of monetary aggregates like M2. Researchers (Bank of England, Dutch Central Bank, and more recently Bundesbank) and public- and private-sector regulators (FSB, DTCC etc) have been investigating this topic since estimates of collateral velocity were first calculated in 2011.

The full article is available at https://ftalphaville.ft.com/2019/05/22/1558497618000/Guest-post–Collateral-velocity-is-rebounding/

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