The Federal Reserve's contingency financing plan for the century date change

Drossos, Evangeline Sophia; Hilton, R. Spence

Journal Article

The Federal Reserve's contingency financing plan for the century date change

Abstract: With the approach of the new millennium last year, many market participants resolved to limit their exposure to Y2K-related risks by cutting back normal trading activities. The Federal Reserve foresaw that the widespread adoption of such a strategy could lead to serious liquidity problems in key financing markets. Consequently, the Fed undertook to create a Standby Financing Facility that would provide securities dealers with a form of backup funding and ease market anxieties about year-end credit conditions.

Keywords: Stock market; Securities; Liquidity (Economics); Year 2000 date conversion (Computer systems); Monetary policy - United States;