Pension agreements have a risk profile similar to all securities lending transactions. That is, they are relatively safe transactions, since they are secured credits, which are generally used as custodians by a third party. Recovery planning and solutions. Post-crisis rules require banks to draw up resolution and resolution plans or living wills to describe the institutions` strategy of orderly resolution in the event of failure. As with the CRA, regulations treat reserves and treasures as identical to cover cash requirements. But, like LCR, banks believe that state regulators prefer banks to maintain their reserves because they would not be able to smoothly liquidate an important Treasury position to maintain critical functions in the process of recovery or resolution. In addition, since the crisis, the Ministry of Finance has kept funds on the Treasury General Account (TGA) from the Federal Reserve and not from private banks. As a result, the Ministry of Finance, when it receives payments, withdraws reserves from the banking system, for example. B corporate tax. The TGA has become more volatile since 2015, reflecting the Finance Department`s decision to withhold only enough money to cover a week of exits. This has made it more difficult for the Fed to estimate demand for reserves.

Since June 2010, the Federal Reserve has regularly implemented TDF test offers as part of prudent planning. These offers are intended to ensure the availability of TDF and to allow eligible institutions to become familiar with appointment allocation procedures; operations do not affect the short-term conduct of monetary policy. For more information on term deposits, auction results and future testing operations, visit the TDF Resource Centre at www.frbservices.org/central-bank/reserves-central/term-deposit-facility/index.html. U.S. dollar liquidity swaps consist of two transactions. When a CBF buys its swap line with FRBNY, the CBF pays a certain amount of its currency to FRBNY in exchange for dollars at the applicable exchange rate. FRBNY holds the foreign currency in an account with the FCB. The dollars made available by FRBNY will then be deposited into an account managed by the FCB with FRBNY. At the same time, FRBNY and the FCB enter into a binding agreement for a second transaction that requires the FCB to return the dollars and FRBNY in order to return the foreign currency at a given future date at the same exchange rate as the original transaction. Since swap transactions are conducted at the same exchange rate as the original transaction, the value of the foreign exchange amounts recorded is not influenced by changes in the market exchange rate.

At the end of the second transaction, the FCB compensates FRBNY at a market-based rate. FRBNY conducts back-rest transactions with an enlarged counterparty group comprising companies other than primary traders. This increases the Federal Reserve`s ability to conduct large-scale retro-repo transactions to deduct reserves. Additional counterparties are not allowed to participate in frBNY operations as opposed to reverse rest.