IOER

ECB, Federal Reserve, Repo

ECB, EU, Federal Reserve, GCF Repo, IOER, RepoFunds Rate, topstory, US

It can be hard to track the rationale behind government repo market pricing around the world, especially in the face of massive central bank intervention. In a new development, one…

Federal Reserve releases results of survey of senior financial officers at banks about their strategies and practices for managing reserve balances

June 1, 2020

Balance sheets, Federal Reserve, IOER, Repo

February 2020 Senior Financial Officer Survey Key takeaways from the survey included the following: Survey respondents indicated that their LCLoR (lowest comfortable level of reserves), given the constellation of short-term…

What needs to happen for US repo to regain spreads? (Premium)

April 20, 2020

Federal Reserve, Repo, US

Federal Reserve, GCF, IOER, Repo, SOFR, topstory, US

At the end of 2018, US repo traders told us that they were no longer worried about liquidity but spreads were a big concern. Calendar year 2019 saw liquidity pitfalls…

Is US repo heading for trouble? Here’s the story in five charts (Premium)

March 9, 2020

Federal Reserve, Repo, SOFR

Federal Reserve, GCF, IOER, Repo, SOFR, topstory

The media is excited, blogs are buzzing, but the reality is that the health of the US repo market in the face of sharp equity market downturns, a rate cut…

Fed keeps target rate at 1.5%-1.75%, sets IOER at 1.6%, commits to repo liquidity through April 2020

January 29, 2020

Federal Reserve, IOER, Repo

As part of its policy decision, the Federal Open Market Committee voted to authorize and direct the Open Market Desk at the Federal Reserve Bank of New York, until instructed…

Are US negative interest rates even possible?

December 3, 2019

Federal Reserve, Interest rates, Regulatory

Federal Reserve, IOER, negative interest rates, topstory

Pretty much everyone dislikes negative interest rates, including banks, most policymakers and investors. And yet, they have been adopted after all else has failed by multiple European governments and the…

Fed lowers Interest on Excess Reserves to 1.8%

September 18, 2019

Federal Reserve, IOER

The Board of Governors of the Federal Reserve System voted unanimously to lower the interest rate paid on required and excess reserve balances to 1.80 percent, effective September 19, 2019.…

Fed blog: How Do Large Banks Manage Their Cash?

July 17, 2019

cash management, IOER, Liberty Street Economics

As the aggregate supply of reserves shrinks and large banks implement liquidity regulations, they may follow a variety of liquidity management strategies depending on their business models and the interest…

Fed survey sharpens understanding of banks and IOER

December 4, 2018

Federal Reserve, Liquidity Management, Repo

Federal Reserve, IOER, Repo, topstory

A new survey from the Federal Reserve of Senior Financial Officers shines light on why banks use Interest on Excess Reserves (IOER), and what options they might choose if their…

An update on repo, Fed Funds and the IOER spread (Premium)

October 16, 2018

Federal Reserve, Interest rates, Repo

EFFR, IOER, Repo, SOFR, topstory, tri-party

Since its introduction, Interest on Excess Reserves (IOER) has let Federal Reserve account holders earn spreads on the rates they pay institutions that can’t access this Fed rate directly. We…

CCP deposits at the Fed: good theory but bad practice

November 30, 2016

CCP, Federal Reserve, Interest rates, Investments, US

CCPs, Federal Reserve, hedge funds, IOER, topstory

The WSJ’s Katy Burne published an article this week on CCPs that are being paid interest on large amounts of cash placed at the Fed. We covered this when the…

How the Fed will really raise rates, and immediate impacts on securities finance and rates businesses (Premium Content)

September 17, 2015

Federal Reserve, Investments, Liquidity Management, Repo, RRP, US

DTCC, Fed Funds, Federal Reserve, GCF, Interest on Excess Reserves, interest rates, IOER, New York Times, Reverse Repo Facility, RRP, topstory

An excellent article in the New York Times this week detailed the mechanics of how the Fed will raise rates in this post-Quantitative Easing environment. The main point of the…

What the repo market teaches us about the Fed tightening rates

April 8, 2015

Basel III, Dodd-Frank, Federal Reserve, RRP

GCF, IOER, monetary policy, topstory

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Fed's Potter outlines how they will raise rates….using higher IOER as a magnet. We think RRP is a better tool.

October 8, 2014

Federal Reserve, Liquidity Management, Market infrastructure, Regulatory, Repo

Fed Funds, IOER, RRP, topstory

Simon Potter spoke at the SIFMA Conference on Securities Financing Transactions yesterday in New York. Potter is the Fed’s man in charge of open market operations and he explained how…

"Reforming Major Interest Rate Benchmarks" from the FSB looks at using GCF repo as derivatives benchmark

July 23, 2014

Derivatives, Repo, Short Term Interest Rate Benchmarks

CMT, FSB, GCF Repo, IOER, LIBOR, OIS, RRP

The Financial Stability Board published on July 22nd a major report “Reforming Major Interest Rate Benchmarks”. They look at how the ‘IBORs could be reformed. The LIBOR scandal may have…

The Fed updates the Flow of Funds data revealing a better picture of the repo market

June 12, 2014

Fed Flow of Funds report L.207, IOER

Collateral Management, Federal Reserve, Repo

Last week we wrote about an FT article that looked at the Fed’s Flow of Funds numbers. The article had concluded that REIT repo was bigger than broker/dealer repo activity,…

NY Fed Governor Dudley on the Reverse Repo facility: a good tool to manage short rates but not without its risks

May 22, 2014

Federal Reserve, Repo, RRP, Shadow Banking

Fed Funds Market, IOER

William C. Dudley, President of the New York Fed, gave a speech on May 20th to the New York Association for Business Economics called “The Economic Outlook and Implications for…

A paper from the Peterson Institute for International Economics argues to set IOER and RRP at the same rates. It make a lot of sense.

January 29, 2014

Fixed-Rate Full-Allotment Overnight Reverse Repos, IOER, RRP

Federal Reserve, Repo

A recent paper from the Peterson Institute for International Economics “Monetary Policy with Abundant Liquidity: A New Operating Framework for the Federal Reserve” (January, 2014) is absolutely worth reading. The…

New York Fed's Liberty Street Economics blog on the Fed Funds Market; less and less liquidity

December 10, 2013

Federal Reserve, Repo

CCP, Fed Funds, FLHB, IOER, OIS

An article from last week (Dec. 2, 2013) in the NY Fed’s blog Liberty Street Economics is worth a closer look. Entitled “Who’s Lending in the Fed Funds Market” by…

ICMA's 25th Repo Survey is released, showing market growth. But the really interesting part is about Italian banks and CCPs.

September 19, 2013

CCP, Cleared Interest Rate Swaps, Derivatives, ECB, Europe, Regulatory, Repo

Cassa di Compensazione e Garanzia, CC&G, ICMA, IOER, LCH RepoClear

ICMA has released their 25th European Repo Survey, reflecting the market as of June 2013. It shows a larger market, driven by LTRO repayments and greater confidence. But it foreshadows…

The Fed Open Market Committee minutes included a discussion of a new repo facility

August 22, 2013

Federal Reserve, Regulatory, Repo

IOER, QE, Reverse Repo Facility, TAG, Transaction Account Guarantee

The blog Sober Look caught an interesting item in the July Fed Open Market Committee report yesterday. The Fed is investigating creating “a fixed-rate, full-allotment overnight reverse repurchase agreement facility…

Liberty Street Economics: The Fed looks at the SOMA portfolio

August 14, 2013

Cash management, Federal Reserve, Repo

IOER, SOMA

The New York Fed, in their Liberty Street Economics blog, has started a series on the System Open Market Operations (SOMA) portfolio. The first post, which came out on August 12th was…

What the end of the FDIC’s TAG program means for securities finance

December 17, 2012

Cash management, Dodd-Frank, Liquidity Management, Money Market Funds, Regulatory

cash management, FDIC, IOER, TAG

The US Senate last Thursday rejected a possible two year extension of the Transaction Account Guarantee (TAG) program, which both provided insurance to $1.6 trillion in cash holdings (16% of…

"The Big Picture" on connecting Repo and the Fiscal Cliff

December 5, 2012

Regulatory, Repo, Tri-Party Repo

"The Big Picture", Fed Funds, Federal Reserve Securities Lending Program, Fiscal Cliff, General Collateral Repo, IOER, Moody's, S&P

We love it when writers connect the dots. On the blog “The Big Picture” a Dec, 5, 2012 post by James Blanco does just that, connecting General Collateral Repo rates,…

Fed continues to believe in IOER as-is; we think it is time for a serious policy review

December 3, 2012

Cash management, Money Market Funds, Short Term Interest Rate Benchmarks

Federal Reserve, IOER