Yesterday, for the 2d Sunday in a row the Fed announced an "emergency" measure. This one was global rather than just US regional banks. And in that way, it acknowledges how what's going on wasn't about SVB or 1st Republic.

Global Dollar Shortage. Again.https://t.co/7pUxJ9PUYM

— Jeffrey P. Snider (@JeffSnider_AIP) March 21, 2023

To make this announcement, the Fed has to acknowledge "strains in global funding markets" so obviously this isn't about SVB.

Global Dollar Shortage. https://t.co/7pUxJ9PUYM pic.twitter.com/l6Qd5TViHf

— Jeffrey P. Snider (@JeffSnider_AIP) March 21, 2023

The immediate suspect for the current global funding strains is obviously Credit Suisse. And there is good reason to worry about stains getting worse, but it's not what you think.

Unless you're thinking repo and collateral. https://t.co/7pUxJ9PUYM pic.twitter.com/8aiXhUQLLB

— Jeffrey P. Snider (@JeffSnider_AIP) March 21, 2023

Remember Switzerland $ auctions last October? Turns out they really were a big deal but not because Credit Suisse was doing the borrowing.

Swiss banks who *had been* borrowing in repo *from* CS when CS suddenly cut back lending forced to find $s via SNB.https://t.co/7pUxJ9PUYM pic.twitter.com/i5Vm485FVB

— Jeffrey P. Snider (@JeffSnider_AIP) March 21, 2023

Like Swiss banks of old (before '08), huge part of Credit Suisse's business had been supplying US$s via repo and wholesale. Nearly 15% of its total assets.
But as CS has been de-risking and cutting back, it cut way back on repo and securities lending.https://t.co/7pUxJ9PUYM pic.twitter.com/W1sgNE6Lqm

— Jeffrey P. Snider (@JeffSnider_AIP) March 21, 2023

We do have some serious collateral scarcity indications this weeks, starting with Japan's government bills. 3-month J-bill rate today below (more negative) extremes last October (remember Switzerland).https://t.co/7pUxJ9PUYM pic.twitter.com/AMczmdbhTI

— Jeffrey P. Snider (@JeffSnider_AIP) March 21, 2023