Alternative Arrangements for the Distribution of Intraday Liquidity
نویسنده
چکیده
In July 2006, the Federal Reserve will end its provision of free daylight credit to governmentsponsored enterprises (GSEs), financial services corporations created by Congress to establish a secondary market in mortgages and other consumer loans. To meet their payments to investors, the GSEs can use a wide variety of alternative funding arrangements. While such arrangements can in theory distribute liquidity efficiently, a decline in the intraday funds in circulation following the Fed’s move may lead to some slowing in payments by both the GSEs and commercial banks.
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