Domestic banks are inelastic providers of marginal funding to repo markets

Rosie Levy and Matthew McCormick
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Rosie Levy: https://www.dallasfed.org/research/economists/levy

Dallas Fed Economics from Federal Reserve Bank of Dallas

Abstract: As system liquidity declines and rates of return rise, new types of participants enter repo markets as lenders, although some may not be able to reliably deploy cash in the early morning when markets are most active. The short tenor and early-morning timing of most private market repo transactions make domestic banks especially inelastic lenders in response to unanticipated demands for lending

Keywords: banks; liquidity; repo (search for similar items in EconPapers)
Date: 2026-02-12
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Persistent link: https://EconPapers.repec.org/RePEc:fip:d00001:102855

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