New York Fed met with Wall Street firms about key lending facility: FT

 The New York Fed recently held a private meeting with its primary dealer firms, Wall Street banks that trade US Treasuries,  due to strains on the short-term funding markets. The main point of the discussion was the standing repo facility(SRF). The SRF is a tool the Fed makes available for firms to swap collateral for cash. The Fed wants to use it more as a buffer against money market disruptors moving forward. 

    The meeting also highlighted growing concern about tight bank reserves and upward pressure on short-term borrowing costs tied to the repo market. Although the SRF exists, many institutions have been reluctant to use it. This is in part because doing so might signal financial weakness, which is never great to see. Overall, the Fed's message is simple: if it makes economic sense, borrow from the facility.

article: New York Fed met with Wall Street firms about key lending facility: FT