Williams argues centrally clearing standing repo operations would improve participation and enhance monetary policy effectiveness.
“Strictly from a monetary policy implementation perspective, there are likely benefits from offering a centrally cleared version of SRPs.”
Williams sees benefits from centrally clearing standing repo operations to improve participation and enhance interest rate control.
“Centrally clearing SRPs would be one way to reduce such costs. Strictly from a monetary policy implementation perspective, there are likely benefits from offering a centrally cleared version of SRPs.”
Williams says banks now report significantly lower hurdle spreads for using standing repo operations.
“As shown on the left side of Panel 14 , banks reported significantly lower “hurdle spreads”—that is, how far above the SRP rate market repo rates need to be for them to “actively consider” using SRP operations.”