The Fed is out with a report with some suggestions for banks in raising liquidity.
- Banks should ensure they are familiar with the pledging process for different collateral types and be aware that pre-pledging collateral can be useful if liquidity needs to arise quickly
- Banks should consider small value discount window transactions at regular intervals
- Events of H1 underscore importance of liquidity risk management and contingency planning
This is good advice that banks will certainly ignore.
This article was written by Adam Button at www.forexlive.com.