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Tri-party Repo platform - Fed involvement


Dave
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 Dave
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Hi Joseph, I was watching your interview with George Gammon and found it a very good session.

I had a question on when you mentioned that the Fed conducts monetary policy and repo on the tri-party platform. Is it using the GCF segment or the non-cleared traditional tri-party arrangement?

I was reading here: https://www.newyorkfed.org/aboutthefed/fedpoint/fed04.html

which seemed to suggest that reverse repos are done DVP, i.e. bilaterally (cleared or not cleared?). Any thoughts on that?

Is it only when Fed is lender in a repo that it goes through the tri-party platform and that reverse repo is bilateral and thus Fed is important player in all segments of repo market? 

Thanks

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Joseph Wang
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There are four segments in the repo market - tri-party, GCF (tri-party settled, FICC cleared), DVP FICC (bilateral settled, FICC cleared), DVP uncleared (bilateral settled, uncleared). 

Fed operates only in the tri-party platform, which is essentially a service that helps cash providers lend without having to manage all the back office stuff. MMFs and primary dealers all have access to the tri-party platform, and the Fed operates both RRP and RP on it. 

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Dave
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Thanks, and to confirm, Fed only operates in traditional tri-party, implying not GCF or central clearing through FICC?

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Joseph Wang
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confirm. 

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