Chase P. Ross

Financial Economics Ph.D. Candidate
Yale University

chase.ross [at]

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Who Ran on Repo?, with Gary B. Gorton and Andrew Metrick, June 2019.

The sale and repurchase (repo) market played a central role in the recent financial crisis. From the second quarter of 2007 to the first quarter of 2009, net repo financing provided to U.S. banks and broker-dealers fell by about $900 billion—more than half of its pre-crisis total. Significant details of this “run on repo” remain shrouded because many of the providers of repo finance are lightly regulated or unregulated cash pools. In this paper, we supplement the best available official data sources with a unique market survey and data from the footnotes of public companies’ quarterly filings to provide an updated picture of the dynamics of the repo run. We provide evidence that the flight of foreign financial institutions, domestic and offshore hedge funds, and other unregulated cash pools predominantly drove the run. Our analysis highlights the danger of relying exclusively on data from regulated institutions, which would miss the most important parts of the run.