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Fed may struggle to rid backstops of stigma amid new push
The U.S. Federal Reserve is encouraging banks to count on its long-shunned cash backstops in a bid to support its monetary policy and financial stability goals. Its latest efforts may not move the dial much. The Fed’s discount window and the Standing Repo Facility (SRF) are credit backstops where lenders can get cash against collateral such as Treasury bonds. They can also double as monetary policy tools, helping to keep interest rates close to the Fed’s policy rate. But banks have been reluctant to use them, as it can signal they are under stress. In its latest effort to get past these issues, the Fed in August ... (full story)