The Federal Reserve Bank of New York (FRBNY) has provided its first public update on the status of Tri-Party repo reform in over a year.

The update makes the following points:

  • The new settlement processes for Tri-Party Repo put in place by the tri-party clearing banks has been substantially completed;
  • The amount of intra-day credit extended by the clearing banks and used to settle tri-party repo has fallen from 100% as late as 2012 to 3-5% today;
  • Certain work remains to fully integrate General Collateral Finance (GCF) repo with the new settlement processes for tri-party repo;
  • Fire sale risk is a remaining policy concern of FRBNY but acknowledges industry efforts to develop centrally cleared repo which could help mitigate fire sale risk.

The full update can be found here. 

Good Day. DR2