There Is Now Only One Clearing Bank In The United States, and The Financial Community Is Eerily Silent

Published
October 20, 2019

With only one bank left on Wall Street to clear repo trades, things could get very ugly very fast if the financial system were to experience anything close to what was seen during the collapse of Bear Stearns in 2008.

Now granted, there was only two clearing banks before J.P Morgan stepped down, but this isn’t just any bank; JPM accounts for whopping 14% of total bank assets in the United States!

For more on this story, visit the link below:
“Wall Street’s Trillion-Dollar Monopoly Has Repo Traders on Edge”, Bloomberg

Could this be a sign of something much more problematic brewing within this massive systemically important financial institution? Just recently Reuters reported that JPM had reached their cash limit, and that this actually played a much larger role in the sudden spike in the overnight repo rate experienced last month than many market specialists would like to believe.

JPM holds an astounding 65% of total equity derivatives in the United States, and if the market were to encounter a sudden and prolonged decline similar to what was seen in the 4th quarter of last year, this could certainly cause some big problems for the mega-bank; but as of now, we can only speculate.

Below is a list of the repo market’s largest participants

To learn more about the repo market, watch this video

2 thoughts on “There Is Now Only One Clearing Bank In The United States, and The Financial Community Is Eerily Silent

    1. I pinned a bunch of older articles to the top of the feed. Browse through the entire site; it’s incredible. Start with the flash facts section. 1000’s of hours went into this website.
      https://thefinancialoligarchs.com/flash-facts/
      This was originally started with the intention of turning it into some kind of stock trading service, but because of all the blocking on reddit, facebook, twitter, its basically just my blog now, but I still work on it frequently.

      This is an incredible resource and it probably won’t be around forever, so take advantage while it’s still around. It’s highly filtered, and everything is presented in a way so you can quickly digest the info in as little time as possible. A lot of the headlines actually took a long time to vet if you can believe that. Like these ones here:
      https://thefinancialoligarchs.com/2020/03/14/the-implicit-government-banking-subsidy-was-300-billion-in-2011/
      https://thefinancialoligarchs.com/2020/03/13/fidelity-dominates-the-high-risky-equity-corporate-bond-repo-market/
      https://thefinancialoligarchs.com/2020/03/14/flash-fact-from-2007-2016-average-net-equity-issues-of-nonfinancial-corporations-was-negative-412-billion-on-an-annualized-basis-william-lazonick/

      The homepage is meant to be a feed that you can scroll.

      Very niche. Browse through the entire homepage.
      Start here https://thefinancialoligarchs.com/page/3/

      Also the fund activity is, again, highly filtered. I have a list of highly concentrated hedge funds that I go through each quarter and hand pick the plays that stand out the most https://thefinancialoligarchs.com/duediligence/fundactivity/

      Really this shouldn’t even be free, quite frankly lol…but anyways.

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