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my @FT op-ed on why emerging and developing countries should ignore the gospel of structural reforms in bond markets @AnnPettifor @KevinPGallagher @CriticalDev @cacrisalves @BJMbraun @nssylla @adam_tooze @MiriamBrett
I expand on very tight word limit: IMF/WB/FSB gospel too easily dismissed the systemic faultlines underpinning US bond market architectures, from the ‘paradox of liquidity’ to moral hazard and the hierarchical nature of the global monetary system.
Lehman's failure demonstrates that the 'paradox of liquidity', that it disappears when it's most needed, is a feature not a bug of US bond market model (with its repo and derivative plumbing).
