Corzine used the repo trade to finance purchases of billions of dollars of volatile European sovereign debt instead, thereby multiplying the liquidity and risk management needed to come out ahead.

FORBES: Uncontrolled Risk Taking, Not Bad Accounting, Did MF Global In

One of our concerns was that the infrastructures of those markets and the risk- and liquidity-management practices of market participants would not be adequate to deal in an orderly way with the collapse of a major counterparty.

FORBES: Transcript

However, we do believe, we have the leadership, the experience, the risk management discipline, the capital strength and certainly the liquidity to ride out the cycle.

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International bank regulators gave a second dangerous incentive to banks to lend to these countries, by classifying the debt as a close proxy for money for liquidity-management purposes (or to give protection against the risk of a bank run).

BBC: The eurozone's borrowing costs may stay lethally high