Collateral as Currency, Part 2
Financial asset hypothecation is not something new invented by eurodollar banks. What they did was repurpose a process that dates back a long way in order to be able to fill, ironically, the same gap as what had led to securities lending in the first place. Yet, it wasn’t enough and dealers had to innovate even more, unleashing securitization before hubris and stupidity brought it all back to the beginning.
