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…Read More
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…Read More
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…Read More
How the Fed will really raise rates, and immediate impacts on securities finance and rates businesses (Premium Content)
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…Read More
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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.
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…Read More
"Reforming Major Interest Rate Benchmarks" from the FSB looks at using GCF repo as derivatives benchmark
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…Read More
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,…Read More
NY Fed Governor Dudley on the Reverse Repo facility: a good tool to manage short rates but not without its risks
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…Read More
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.
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…Read More
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…Read More
ICMA's 25th Repo Survey is released, showing market growth. But the really interesting part is about Italian banks and CCPs.
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…Read More
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…Read More
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…Read More
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…Read More
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,…Read More
The Federal Reserve’s Liberty Street Economics blog published an article today on why the Interest on Excess Reserves (IOER) should be kept at 25 bps in the current environment. The…Read More