econintersect.com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 09 July 2016

Repurchase Agreements As An Instrument Of Monetary Policy At The Time Of The Accord

from the New York Fed

Following the Treasury-Federal Reserve Accord of March 3, 1951, the Federal Open Market Committee (FOMC) focused on free reserves - the difference between excess reserves (reserve deposits in excess of reserve requirements) and borrowed reserves - as the touchstone of U.S. monetary policy. However, managing free reserves was problematic because highly variable and not readily predictable autonomous factors, including float, Treasury balances at Federal Reserve Banks, and currency in the hands of the public, induced comparable volatility and unpredictability in reserve deposits and hence in free reserves.

Managing free reserves effectively required policy instruments that could inject and drain large quantities of reserves quickly at low transaction costs.

This paper surveys the two leading policy instruments for reserves management: 1) open market purchases and sales of Treasury bills, and 2) repurchase agreements. Outright transactions in bills were specifically authorized by statute and used in unexceptional ways for managing reserves over relatively long periods, but they had significant drawbacks for short-term "in and out" operations when additional reserves were needed for only a few days. Repos, however, while not specifically authorized by statute, were ideally suited for in-and-out operations. The acceptance of repurchase agreements as an instrument of monetary policy, even in the face of active resistance by some FOMC members, illustrates how utility can sometimes trump concerns about statutory authority, equity, and need.

[click on image below to continue reading]

Source: https://www.newyorkfed.org/medialibrary/media/research/ staff_reports/ sr780.pdf? la=en

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical News Post Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted. You can also comment using Facebook directly using he comment block below.




Econintersect Contributors


search_box

Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.


Take a look at what is going on inside of Econintersect.com
Main Home
Analysis Blog
Slow Economic Growth Will Be Around For A Long Time
The Job Guarantee, Wage-Price Inflation And Alternative Solutions: Part 2
News Blog
Wage Growth After The Great Recession
Is OPEC Losing Its Ability To Influence Oil Prices?
Many Worry That The Great Recession And Mounting Student Debt Have Stunted Millennials' Financial Development
Infographic Of The Day: Visualizing The Shifting Income Distribution Of American Jobs
Early Headlines: Asia Stocks, Dollar, Oil All Down, Gold Up, Border Wall Obstacles, US To 'Fix' Gov With Business Ideas, ACA Death Spiral, US C-I Lending Down, Merkel Election Boost, And More
Most Read Articles Last Week Ending 25 March
Funded By The Crowd
U.S. Top Source Of DDoS Attacks In Q4 2016
How Artificial Intelligence And The Robotic Revolution Will Change The Workplace Of Tomorrow
Amazon's Alexa Is A Fast Learner
What We Read Today 26 March 2017
NASA's Plan To Use A Giant Magnet To Make Mars Habitable
Mexico Faces Cloudy 2017 Outlook, Recent Data Mixed
Investing Blog
Market And Sector Analysis 25 March 2017
Earnings: A Lot Less Than Meets The Eye
Opinion Blog
Is The 20th Century Still The 'Hayek Century'?
Yellen's Dangerous Glass-Steagall Repression
Precious Metals Blog
These Gold Stocks Will Produce Much Bigger Gains Than Gold Itself
Live Markets
27Mar2017 Pre-Market Commentary: Fasten Seat Belts As The DOW Is Set To Open Down Triple Digits, Crude Prices Slipping Along With The US Dollar, Not A Good Day On Wall Street
Amazon Books & More






.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government































 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2017 Econintersect LLC - all rights reserved