Discussion Paper

Standing Repo Facilities, Then and Now


Abstract: Recently there have been discussions, both within the FOMC and more broadly, about whether the FOMC should set up a standing repo facility. Such a facility would allow banks to sell safe assets (U.S. Treasury securities) to the Fed, with the assurance of subsequent repurchase, in unlimited quantities at an administered rate. This is not a new idea. In fact, a similar facility was implemented in 1683by the Bank of Amsterdam, the leading central bank of the time, and operated for more than a century afterward. In this article, we describe the motivations, operations, and limitations of the Bank of Amsterdam’s facility and what lessons this historical experience offers for modern-day central banks.

https://doi.org/10.29338/ph2020-01

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Provider: Federal Reserve Bank of Atlanta

Part of Series: Policy Hub

Publication Date: 2020-01-01

Number: 2020-1