For all the concern over the shrinking size of the world’s wholesale funding markets, some of the firms that actually use them are feeling pretty relaxed.
Europe’s market is stagnating at levels 20 percent below its peak. In the U.S., the contraction of repurchase, or repo, agreements, is more like 50 percent. And some would have regulators believe that has created an accident waiting to happen. That’s because the market -- where debt securities are borrowed and lent -- is a vital cog in the world’s financial plumbing. The biggest banks rely on it for their day-to-day funding needs.
