Funding Freeze Getting Worse: Dealers Demand Record $216BN In Liquidity From Fed Repo
- Funding Freeze Getting Worse: Dealers Demand Record $216BN In Liquidity From Fed Repo
by Tyler Durden, https://www.zerohedge.com/
Yesterday, when showing the sudden spike in the FRA/OIS spread – a key gauge of banking-sector risk which measures dollar shortages – we warned that liquidity in the market is virtually nil quoting a host of traders who confirmed that it was next to impossible to trade without disruptions, while more ominously, the interbank plumbing appeared to be getting clogged up again.
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Moments ago we got confirmation when the Fed reported that one day after it expanded its repo operations, there was a record demand for Fed liquidity in both the term and repo operations. With the term repo expanded from $20BN to $45BN and the overnight repo ceiling also raised from $100 to $150BN, moments ago the Fed announced that it had received the most liquidity demand on record, as Dealers indicated some $93BN in term repo submissions (which thanks to the expanded facility size meant that the oversubscription dropped from a record 3.6x to 2.1x)…
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