FYI: The Federal Reserve Bank of New York is examining why banks with excess cash failed to lend to the overnight money market, following a week that revealed cracks in the US’s financial plumbing.
John Williams, president of the New York Fed, on Friday questioned the hesitance of the banks in an interview with the FT. “The thing we need to be focused on today is not so much the level of reserves [held at the Fed],” he said. “It’s how does the market function.”
Overnight borrowing rates rose as high as 10 per cent on Tuesday morning, prompting the New York Fed to intervene in the overnight repurchase, or repo, market for the first time since the financial crisis, injecting cash in an effort to unblock the system.
Regards,
Ted
https://www.ft.com/content/83a5bb70-dbca-11e9-8f9b-77216ebe1f17
