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Repo Oracle Zoltan Pozsar Expects Even More Turmoil

The Credit Suisse analyst foresaw the recent trouble in the financial system’s plumbing. He says it’s not over.

Zoltan Pozsar

Zoltan Pozsar

Photographer: Ryan Duffin for Bloomberg Businessweek

In September an often overlooked but vital part of the global financial system short-circuited. It’s called the overnight repurchase agreement, or “repo,” market, and when it seized up, the interest rate that institutional borrowers had to pay for very short-term loans went (briefly) through the roof.

In the aftermath, people in the market sought answers—to understand both what had gone wrong and the risk of it happening again. Many have turned to a Credit Suisse Group AG analyst named Zoltan Pozsar, who predicted the breakdown with almost eerie accuracy in an August research note.