Selected Deposits and the OBFR
Abstract: The Federal Reserve Bank of New York recently decided to revise the composition of the Overnight Bank Funding Rate (OBFR), a reference rate measuring the cost banks face to borrow overnight in unsecured U.S. dollar-denominated money markets. Specifically, in addition to the federal funds and Eurodollar transactions currently comprising the OBFR, the OBFR now also includes overnight, interest-bearing demand deposits (at rates negotiated between the counterparties and excluding deposits payable on demand) booked within banks? U.S. offices, known as ?selected deposits.? In this post, we discuss the change in more detail, the reason for including selected deposits, and the likely impact on the OBFR?s published values.
JEL Classification: G21;
File(s): File format is text/html https://libertystreeteconomics.newyorkfed.org/2019/05/selected-deposits-and-the-obfr.html
Provider: Federal Reserve Bank of New York
Part of Series: Liberty Street Economics
Publication Date: 2019-05-06