In June 2013，there was a rare “money shortage” in China’s financial market: the repo rate reached a record high of 30%，bond issues failed and yields rose sharply. Massive fund redemptions followed，straining the market infrastructure. Some institutions defaulted and the stock market plummeted.

Money shortages – dangerous and sometimes surprising in their severity –  are not necessarily a thing of the past. Some – though not all – of the contributing factors are still with us today. The fact that various factors were intertwined and appeared together at a sensitive time made this cash crunch one of the most complex events in China's financial history.

More recently，the US had its own taste of a money shortage. On September 16，2019 the effective federal funds rate，or EFFR，suddenly surged. (The federal funds rate is the interest rate at which depository institutions lend balances at the Federal Reserve to other depository institutions overnight.) The weighted average rate rose from the previous session’s 2.15% to 2.25%. That reached the upper limit of the federal funds target rate (FFTR) range of 2-2.25% and exceeded 3% at its peak. The next day，the EFFR continued to rise，with the weighted average rate reaching 2.3%，again breaking the upper end of the FFTR range and briefly exceeding 4%. (See Chart 1) The repo rate，meanwhile，shot up to a dangerous 10%，a highly unusual level. This was an American funding crunch.

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