Treasury Borrowing Advisory Committee: total demand for "High Qualty Collateral" (HQC) would and could be as high as $11.2 trillion under stressed market conditions.

Those are the words of ZeroHedge paraphrasing the TBAC presentation to the Office of Debt Management.
The collateral section begins on page 50 (51 in the reader) but the whole slideshow is one heck of a peek under the kimono.
From ZH:

Desperately Seeking $11.2 Trillion In Collateral, Or How "Modern Money" Really Works
Over a year ago, we first explained what one of the key terminal problems affecting the modern financial system is: namely the increasing scarcity and disappearance of money-good assets ("safe" or otherwise) which due to the way "modern" finance is structured, where a set universe of assets forms what is known as "high-quality collateral" backstopping trillions of rehypothecated shadow liabilities all of which have negligible margin requirements (and thus provide virtually unlimited leverage) until times turn rough and there is a scramble for collateral, has become perhaps the most critical, and missing, lynchpin of financial stability.
Not surprisingly, recent attempts to replenish assets (read collateral) backing shadow money, most recently via attempted Basel III regulations, failed miserably as it became clear it would be impossible to procure the just $1-$2.5 trillion in collateral needed according to regulatory requirements.

The reason why this is a big problem is that as the Matt Zames-headed Treasury Borrowing Advisory Committee (TBAC) showed today as part of the appendix to the quarterly refunding presentation, total demand for "High Qualty Collateral" (HQC) would and could be as high as $11.2 trillion under stressed market conditions. 

In short, there is a unprecedented "quality" collateral shortage (for more on what the definition of quality is, read on).

And since the topic of HQC scarcity only emerges when market conditions are stressed, one can ignore the TBAC's baseline case of normal conditions, which see a topline of collateral requirements of "only" $5.7 trillion. Needless to say that if not even the Basel III required asset/collateral creation of $1-$2 trillion was a failure, even the base case requirement would never be satisfied.

The bigger picture however is one of an ever-growing asset-liability mismatch, as happened during the Lehman collapse. Since there is a total excess of shadow money and other liabilities already created that may need up to $11.2 trillion in collateral at any one moment for full book netting (which incidentally is based on SFAS-140 accounting rules which are self-contradicting), the only hope for the financial system is to chug along for the next decade without major risks and tremors, and slowly create the much needed high quality collateral.Or such is the hope.

Furthermore, since the private sector still appears to be in a state of shock from the Great Financial Crisis, collateral creation is all but halted. In the purely physical sense this is further aggravated by the lack of private sector CapEx investment, whereby corporations refuse to spend in order to procure hard assets, which may then be transformed into HQE via assorted lending pathways ending up on bank balance sheets indirectly, and then be further absorbed by the financial system providing even more quality collateral.

Intuitively this should make sense: while private sector companies can create unlimited balance sheet liabilities courtesy of the ZIRP-enforced scramble for yield, which means any and all debt can be issued without limits, it is the use of funds that is critical, and it is here that companies have been failing desperately because as also explained previously, instead of investing the newly created cash in CapEx and PP&E due to the Fed's disastrous policies, management teams use the company as a toll, with the cash promptly dividended out or used for buybacks and other short-term shareholder benefiting transactions, not growing corporate assets in any way, and certainly not creating any secured liabilities, only unsecured. Sadly the liabilities thus created are of such low quality that they can not result in HQC replacement, and instead are merely a levered equity extraction out of the private sector which implies an even greater explicit private sector risk without offsetting asset creation (the matching accounting entry is a reduction in shareholder equity which does nothing for system collateral).

As a result of this unwillingness or inability of the private sector to create quality collateral, which could then become someone else's quality asset and so on up the fractional reserve repo chain, it is all up to the Fed.

The TBAC acknowledges as much when it says that all QE is, is a "transformation of non-cash HQC to cash HQC."...MORE

Hmmmm....now where have I seen that idea before?

For more on kimonos Immortal Geisha is a good start.
For more on QE see Izzy.