Remaining Risks in the Tri-Party Repo Market

Antoine Martin

No 20111107, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: The tri-party repo market is one in which large U.S. securities firms and bank securities affiliates (dealers) finance much of their fixed-income securities inventories. A New York Fed white paper and the Financial System Oversight Council annual report have highlighted the risks to financial stability arising from the current infrastructure of this market. The Tri-Party Repo Infrastructure Reform Task Force (Task Force), an industry group sponsored by the New York Fed, has been working on reforms that would address some of these concerns. Unfortunately, a key aspect of the reforms—capped and committed clearing bank credit—has been delayed. In this post, I describe the remaining risks created by this delay.

Keywords: unwind; Tri-party repo market; settlement (search for similar items in EconPapers)
JEL-codes: G1 (search for similar items in EconPapers)
Date: 2011-11-07
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