Article:
“On January 13, the New York Federal Reserve gave $60.7 billion to eligible private financial institutions by leveraging U.S. Treasurys and agency securities. With all the stimulus given to financial institutions since September, it hasn’t relieved the stress of economic uncertainty. Now the Fed is pondering giving money directly to hedge funds and private brokers in order to ease the current pressure and lack of liquidity within U.S. repo markets. Moreover, two Federal Reserve branch presidents have voiced concerns in regards to the American economy in 2020.” https://news.bitcoin.com/fed-officials-ponder-funding-hedge-funds-and-private-brokers-directly/ Also reported in the WSJ (might be harder to access):
“Federal Reserve officials are considering a new tool to ease stresses in the market for Treasury repurchase agreements, or repos. Through the repo market, banks and hedge funds borrow cash overnight, while pledging safe securities such as government bonds as collateral. In September, an unexpected shortage of available cash to lend sparked a surge in the cost of repo-market borrowing, prompting the Fed to intervene for the first time since the financial crisis. One potential solution is to lend cash directly to smaller banks, securities dealers and hedge funds through the repo market’s clearinghouse, the Fixed Income Clearing Corp., or FICC.” https://www.wsj.com/articles/hedge-funds-could-make-one-potential-fed-repo-market-fix-hard-to-stomach-11578997801
