Q&A continues: Q: BIS said repo spike was not...>

FED: Q&A continues:

Q: BIS said repo spike was not a one-off event, do you agree with their

findings? Will you be taking extra steps on repo markets at year-end?

- A: Want to start by stressing these are very important operational matters,

but no macroeconomic implications. The purpose of all this is to assure MonPol

transmission, not to eliminate all volatility, particularly in the repo market.

We gradually allowed the balance sheet to shrink, had a buffer in reserves, but

in Sep market acted like there was scarcity. We have looked carefully at why

that happened, we're open to ideas re supervisory/regulatory changes.

- In Sep/Oct we took steps and t's working, last couple of months repo markets

have functioned well.

- Re year-end: temporary movements are not unusual. Pressures appear manageable,

we stand ready to adjust to keep Fed funds rate in target range. Strategy has

been to supply reserves in near-term via TOMO and via purchases in medium-term.

We would be prepared to buy medium term securities, we're not in that place yet.

Talking to market participants, focused on year-end.