Bloomberg by the Numbers: 35%

Photograph by Scott Eells/Bloomberg

Repurchases, or repos, are part of the non-bank, or “shadow banking,” sector. Banks use repos to help finance investments in Treasuries, corporate bonds and mortgages-backed securities.

That’s the decline in the repurchase, or repo, market where banks and investors borrow and lend Treasuries and other fixed-income securities — with $4.6 trillion daily outstanding last month, down 35 percent from its peak of $7.02 trillion in the first quarter of 2008.

Regulations aimed at reducing the risk of another financial crisis are starting to upend a key part of the bond market that expedites trading in everything from U.S. Treasuries to junk bonds, as Bloomberg’s Liz Capo McCormick and Anchalee Worrachate report today.

The data come from Federal Reserve tracking of 21 primary dealers.

From fewer repos to lower inventories of bonds, financial institutions are responding to more stringent capital standards imposed by regulators around the world. Already, the group of dealers and investors that advise the U.S. Treasury say that they see declines in liquidity in times of market stress,

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