The whole process of de-stocking is opaque but it seems that the executor will be local governments who will mop up the liquidity. So, which projects will be cherry-picked? At what price, marked-to-market? book? This is a prime example of a failure of market pricing and the direct effect cannot be predicted, the indirect effects even more so. The fact is that the prop market reached its heights via market mechanisms, so to ignore the converse is naive.
What is PSL?
The whole process of de-stocking is opaque but it seems that the executor will be local governments who will mop up the liquidity. So, which projects will be cherry-picked? At what price, marked-to-market? book? This is a prime example of a failure of market pricing and the direct effect cannot be predicted, the indirect effects even more so. The fact is that the prop market reached its heights via market mechanisms, so to ignore the converse is naive.