The 2020 financial meltdown was caused by a banking crisis that started before COVID even hit.
March 19, 2026
Original Paper
The Repo Market and the March 2020 Meltdown: A Banking Crisis Misdiagnosed
SSRN · 6301660
The Takeaway
While the world blamed the pandemic for the market crash, evidence from Federal Reserve data suggests the banking system's internal funding plumbing was already failing. The study argues that the pandemic was merely an accelerant for a banking crisis that was already inevitable due to dwindling reserves and systemic fragility.
From the abstract
The March 2020 financial market meltdown is widely attributed to the COVID-19 pandemic's economic shock, marked by steep equity declines, chaotic Treasury market movements, and a frantic scramble for liquidity that gripped global financial systems. Conventional accounts frame this crisis as an exogenous event, driven by lockdown fears and economic uncertainty, with the Federal Reserve's aggressive interventions-slashing interest rates to near-zero and injecting $700 billion through quantitative