It’s pretty well accepted that no one knows as much about the plumbing of the world’s financial system as Zoltan Pozsar, global head of short-term interest-rate strategy at Credit Suisse, who was the point person on market developments for senior U.S. officials during the 2008 global financial crisis and has mapped out the shadow banking system. The mechanics of the financial system are the type of thing you don’t really have to think about, until you do, when there’s a breakdown.
The issue is, it’s been breaking a lot — by Pozsar’s telling, three times since 1997, most recently in 2019, when the Federal Reserve briefly lost control of the overnight interest-rate market. And Pozsar, as well as other experts, thinks the U.S. sanctions on Russia mark a momentous shift since the largest commodity producer in the world has been put in the penalty box.
Also read: Russian commodities…
