New York Fed's Perli: Ample Reserves Framework Sufficient to Handle Market Shifts

Roberto Perli of the Federal Reserve Bank of New York stated that the Federal Reserve's ample reserves framework is "fully capable" of handling demand shifts triggered by changes in technology, regulation, or other factors. Changes in money market conditions are "likely driven by forces reshaping the structure of money markets," citing the U.S. Securities and Exchange Commission (SEC) mandate requiring central clearing for cash Treasury and repurchase agreement transactions as an example. Implementing central clearing for the Federal Reserve's Standing Repo Facility (SRF) can reduce dealers' costs and improve participation among specific counterparties, thereby alleviating pressure on funding markets.