Fed's Standing Repo Facility: A New Tool for Financial Stability
Update: 2025-11-12
Description
Standing Repo Facility: A New Tool for Financial InstitutionsRoberto Perli, a key official from the Federal Reserve Bank of New York, discusses the Standing Repo Facility, a tool that helps banks and financial firms get cash quickly by exchanging bonds. Perli emphasizes that its beneficial for firms to use this tool when it makes good financial sense and that large-scale use wouldnt be a problem. He also mentions that firms have used similar Fed operations in the past on a large scale. The facility operates twice a day, acting as a shock absorber for the financial markets. Perli believes that as Wall Street becomes more comfortable with the tool, its usage could increase, especially if financial pressures persist or get worse. He also echoes comments from New York Fed President John Williams, suggesting that the Feds bond holdings will likely need to grow soon to support the expanding financial system.
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