In the United States, under regulations that went back to 1934, such rehypothecation of collateral was strictly limited to no more than 140 percent of the collateral being held. In the UK there was no limit on rehypothecation. As a result, according to investigations by a team of analysts from the IMF, the City of London came to function as a “platform for higher leveraging not available in the United States.” The scale of this activity was enormous. According to the IMF team, trading in and out of London the main European and US banks achieved a collateral multiplication of 400 percent,
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