Discussion Paper

The Federal Reserve’s Large-Scale Repo Program


Abstract: The repo market faced extraordinary liquidity strains in March amid broader financial market volatility related to the coronavirus pandemic and uncertainty regarding the path of policy. The strains were particularly severe in the term repo market, in which borrowing and lending arrangements are for longer than one business day. In this post, we discuss the causes of the liquidity disruptions that arose in the repo market as well as the Federal Reserve’s actions to address those disruptions.

Keywords: pandemic; COVID-19; repo market; Federal Reserve inventions;

JEL Classification: G1; E5;

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Bibliographic Information

Provider: Federal Reserve Bank of New York

Part of Series: Liberty Street Economics

Publication Date: 2020-08-03

Number: 20200803