The Federal Reserve should further open up access to its standing repo facility to mitigate chances of any repeat of the March 2020 market instability as the Covid-19 pandemic first struck, former Treasury Secretary Tim Geithner and former Fed Governor Jeremy Stein said Thursday.
The two led an update on a G30 report originally released a year ago that again advocated reform of the supplementary leverage reform, consideration of central clearing of Treasuries, and enhancing trading transparency. Geithner, also a former New York Fed President, acknowledged the slow pace of reforms in the Treasury market but said he is hopeful that substantive reforms can still be made.
Stein said the current setup of the SRF is "probably adequate" for the goal of monetary policy implementation but urged a wider facility as an important piece to forestall preemptive runs or preemptive sales in the market during stressful times. Under Secretary of the Treasury Nellie Liang told MNI in an interview last month the Treasury will be ramping up market reform efforts this year.