Dealer banks' financing sources vulnerable to abrupt reductions in stressful times.
Dealer banks have unique ways of getting money to lend out, like using securities or cash as collateral. They can also use their own funds or money from outside sources. In tough times, their funding can suddenly drop. U.S. rules let dealer banks lend out more money than they show on their books. This can be risky. It's important to manage these risks carefully.