Part 4/9:
The prevailing situation can be traced back to how financial institutions manage their access to cash through the repo market, where they typically exchange collateral, such as U.S. Treasuries, for cash. In instances where demand for liquidity spikes (as it did in September 2019), if institutions are unable to secure cash because they collectively attempt to liquidate their Treasury positions, panic sets in. The Fed must then intervene to provide the necessary liquidity, a situation that Dimon hints might recur.