The biggest risk in the current market ⬇️ Treasuries are being seen as 'contaminated collateral' • Treasuries are the most important collateral in the financial system (the core of the repo system). • Once some T-Bills are labeled as 'default risk assets,' other institutions (hedge funds, banks) will refuse to accept these notes as collateral. → Repo market freezes, systemic liquidity drops sharply. • Similar situations occurred during the 2008 Lehman collapse.