Streetwise Professor

October 18, 2011

Leveraged EFSF: Not Credible

Filed under: Clearing,Financial Crisis II,Politics,Regulation — The Professor @ 2:24 pm

This long Zero Hedge post recapitulates William Buiter’s analysis of the leveraged EFSF “bazooka.”  It is a very detailed exposition of why this mechanism is not credible.  As Buiter lays out, it is not credible primarily because it is laden with wrong way risk.  Good object lesson in what can go wrong with a CCP, by the way.

Print Friendly, PDF & Email

No Comments »

No comments yet.

RSS feed for comments on this post. TrackBack URI

Leave a comment

Powered by WordPress