The Open Market Trading Desk at the Federal Reserve Bank of New York has released its expression of interest form for Standing Repo Facility counterparties. Depository institutions with holdings of Treasury, agency debt, and agency mortgage-backed securities greater than $5 billion or with total assets greater than $30 billion may express interest in becoming a Standing Repo Facility counterparty starting on October 1, 2021. Consistent with the New York Fed’s commitment to ensuring its counterparty policies promote a fair and competitive marketplace, these criteria will be adjusted over time to expand depository institution eligibility.
In July 2021, the FOMC established a Standing Repo Facility (SRF) to serve as a backstop in money markets to support the effective implementation and transmission of monetary policy and smooth market functioning. The SRF is designed to dampen upward pressures in repo markets that may spillover to the fed funds market. In the FOMC’s ample reserve regime for monetary policy implementation, the SRF is not expected to be utilized frequently.
The Desk conducts overnight repo operations under the SRF each business day at a pre-announced bid rate set by the FOMC. Treasury, agency debt, and agency mortgage-backed securities are eligible to settle repo transactions under the SRF. More information on the SRF can be found in Frequently Asked Questions. Information on the results of the Desk’s repo operations is available here.
Primary dealers are counterparties to the SRF and depository institutions will be added as counterparties beginning in the fourth quarter of 2021.
