The secured nature of repo agreements gave firms and regulators confidence that runs were  3  See Walter Bagehot ([1873] 1897), Lombard Street: A Description of the Money Market (New York: Charles Scribner’s Sons). The classic theoretical analysis of “pure” banking panics is in Douglas W. Diamond and Philip H. Dybvig (1983), “Bank Runs, Deposit Insurance, and Liquidity,” Journal of Political Economy, vol.
However, if one accepts the basic premise that our financial system will remain healthy only if the too-big-to-fail problem is addressed in a muscular way, this kind of idea has at least heuristic value in making us think hard about the degree to which the regulatory path we set for ourselves is leading to the proper destination of greater financial stability.