Why is the Fed conducting Repo when US Banks Have $1.4T in Excess Reserves Yet Need Daily "Emergency" Fed Actions. Top US Banks are the primary dealers in the Repo market?
With $1.4 trillion in excess reserves, how can there be a problem with overnight funding?
Emergency Funding Continues
The Fed continued emergency repos as firms are short of cash.
Overnight Lending?
We are clearly not talking about "overnight lending".
A crisis has been going on for days.
Beneath the crisis the observation that companies are using overnight repos, continually, to fund normal operations. Parties no longer trust the collateral.
It took a mid-month crisis to flush this out.
The Fed's alleged solution is to give companies at least $30 billion "14-day" lending, repeated of course, indefinitely. This is on top of at least $75 billion daily.
Excess Leverage
An excess leverage, borrow-short, lend-long scheme of some sort that has seriously gone awry
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