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Discussion Paper
Are New Repo Participants Gaining Ground?
Copeland, Adam; Tarascina, Anya; Selig, Ira (2019-04-03)
Following the 2007-09 financial crisis, regulations were introduced that increased the cost of entering into repurchase agreements (repo) for bank holding companies (BHC). As a consequence, banks and securities dealers associated with BHCs, a set of firms which dominates the repo market, were predicted to pull back from the market. In this blog post, we examine whether this changed environment allowed new participants, particularly those not subject to the new regulations, to emerge. We find that although new participants have come on the scene and made gains, they remain a small part of the ...
Liberty Street Economics , Paper 20190403

Discussion Paper
Intraday Timing of General Collateral Repo Markets
Clark, Kevin; Copeland, Adam; Kahn, Robert Jay; Martin, Antoine; Paddrik, Mark; Taylor, Benjamin (2021-07-14)
Market participants have often noted that general collateral (GC) repo trades happen very early in the morning, with most activity being completed soon after markets open at 7 a.m. Data on intraday repo volumes timing are not publicly available however, obscuring those dynamics to outside observers. In this post, we use confidential data collected by the Office of Financial Research (OFR) to describe the intraday timing dynamics of GC repo in the interdealer market. We demonstrate that a significant majority of interdealer overnight Treasury repo is completed prior to 8:30 a.m. (all times ...
Liberty Street Economics , Paper 20210714

Discussion Paper
With Abundant Reserves, Do Banks Adjust Reserve Balances to Accommodate Payment Flows?
Kraft, Kailey; Huang, Catherine; Copeland, Adam (2022-10-12)
As a result of the global financial crisis (GFC), the Federal Reserve switched from a regime of scarce reserves to one of abundant reserves. In this post, we explore how banks’ day-to-day management of reserve balances with respect to payment flows changed with this regime switch. We find that bank behavior did not change on average; under both regimes, banks increased their opening balances when they expected higher outgoing payments and, similarly, decreased these balances with expected higher incoming payments. There are substantial differences across banks, however. At the introduction ...
Liberty Street Economics , Paper 20221012

Discussion Paper
Mapping and Sizing the U.S. Repo Market
LeSueur, Eric; Davis, Isaac; Martin, Antoine; Copeland, Adam (2012-06-25)
The U.S. repurchase agreement (repo) market is a large financial market where participants effectively provide collateralized loans to one another. This market played a central role in the recent financial crisis; for example, both Bear Stearns and Lehman Brothers experienced problems borrowing in this market in the period leading up to their collapse. Unfortunately, comprehensive and detailed data on this market are not available. Rather, data exist for certain segments of the repo market or for specific firms that operate in this market (see this recent New York Fed staff report). The ...
Liberty Street Economics , Paper 20120625

Report
The Effect of the Central Bank Liquidity Support during Pandemics: Evidence from the 1918 Influenza Pandemic
Chang, Jin-Wook; Anderson, Haelim; Copeland, Adam (2020-05-01)
The coronavirus outbreak raises the question of how central bank liquidity support affects financial stability and promotes economic recovery. Using newly assembled data on cross-county flu mortality rates and state-charter bank balance sheets in New York State, we investigate the effects of the 1918 influenza pandemic on the banking system and the role of the Federal Reserve during the pandemic. We find that banks located in more severely affected areas experienced deposit withdrawals. Banks that were members of the Federal Reserve System were able to access central bank liquidity, enabling ...
Staff Reports , Paper 928

Discussion Paper
Income Evolution at BHCs: How Big BHCs Differ
Copeland, Adam (2012-07-23)
As noted in the introduction to this series, over the past two decades financial intermediation has evolved from a traditional, bank-centered system to one where nonbanks play an increasing role. For my contribution to the series, I document how the sources of bank holding companies? (BHC) income have evolved. I find that the largest BHCs have changed the most; they?ve shifted their mix of income toward providing new financial services and are earning an increasing share of income outside of their commercial bank subsidiaries. In this post, I summarize my study?s key findings.
Liberty Street Economics , Paper 20120723a

Journal Article
An empirical analysis of the GCF Repo® Service
Davis, Isaac; Copeland, Adam; Martin, Antoine (2015)
This article examines how dealers use the GCF Repo service. It begins by explaining the strategies that dealers employ when trading GCF Repo and then uses empirical analysis to quantify the predominance of these strategies. Looking across all dealers and all days, the study finds that on an average day, at least 23 percent of dealers focus on strategies to raise cash and at least 20 percent focus on managing their inventory of securities. This activity involves using GCF Repo to both exclusively source collateral and perform collateral swaps.
Economic Policy Review , Issue 2 , Pages 25-37

Discussion Paper
Are There Too Many Ways to Clear and Settle Secured Financing Transactions?
Keane, Frank M.; Copeland, Adam; Phan, Jenny (2023-05-08)
The New York Fed’s Treasury Market Practices Group (TMPG) recently released a consultative white paper on clearing and settlement processes for secured financing trades (SFT) involving U.S. Treasury securities. The paper describes the many ways that Treasury SFTs are cleared and settled— information that may not be readily available to all market participants. It also identifies potential risk and resiliency issues, and so promotes discussion about whether current practices have room for improvement. This work is timely given the SEC’s ongoing efforts to improve transparency and lower ...
Liberty Street Economics , Paper 20230508

Discussion Paper
How Competitive are U.S. Treasury Repo Markets?
Riordan, Will; Wessel, Timothy; Clark, Kevin; Martin, Antoine; Kahn, Robert Jay; Copeland, Adam; McCormick, Matthew (2021-02-18)
The Treasury repo market is at the center of the U.S. financial system, serving as a source of secured funding as well as providing liquidity for Treasuries in the secondary market. Recently, results published by the Bank for International Settlements (BIS) raised concerns that the repo market may be dominated by as few as four banks. In this post, we show that the secured funding portion of the repo market is competitive by demonstrating that trading is not concentrated overall and explaining how the pricing of inter-dealer repo trades is available to a wide range of market participants. By ...
Liberty Street Economics , Paper 20210218

Working Paper
Prices, production, and inventories over the automotive model year
Hall, George J.; Dunn, Wendy E.; Copeland, Adam (2005)
This paper studies the within-model-year pricing and production of new automobiles. Using new monthly data on U.S. transaction prices, we document that for the typical new vehicle, prices typically fall over the model year at a 9.2 percent annual rate. Concurrently, both sales and inventories are hump shaped. To explain these time series, we formulate a market equilibrium model for new automobiles in which inventory and pricing decisions are made simultaneously. On the demand side, we use micro-level data to estimate time-varying aggregate demand curves for each vehicle. On the supply side, ...
Finance and Economics Discussion Series , Paper 2005-25

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