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The Federal Reserve’s Standing Liquidity Facilities
From tellerwindow.newyorkfed.org
An ample supply of reserves—consistent with the Fed’s “floor system”—and the smooth functioning of funding markets are critical to effectively implement monetary policy. Market disruptions occasionally require the rapid provision of additional liquidity. One way to do this is through open market operations conducted with primary dealers, in which the Fed increases the reserve supply either temporarily or more permanently. The Fed’s standing liquidity facilities also help maintain ample reserve supply and, in addition to supporting market functioning, are important tools for interest rate control. These ... (full story)