Economics

Standing Repo Facility (SRF) is a relatively young Federal Reserve facility. Formally established as a permanent tool in July 2021, SRF allows banks to obtain overnight liquidity with high-quality collaterals like Treasuries through a repurchase agreement. Most people may not be familiar with this "obscure" Fed tool, but it is possible that SRF will soon become one of the Fed's most important tools.

In this installment, we continue our discussion with Prof. Charles Calomiris, Henry Kaufman Professor of Financial Institutions at Columbia Business School. The topic of this installment is the missing role of politics in economics models of banking crises. We also discussed if Calomiris thinks macroeconomics has a similar problem.

Countries with swap line arrangement with Federal Reserve, be it the standing ones or temporary, saw smaller increases in spread during the initial pandemic stress period.

HKD tends to be on the strong side (closer to HKD 7.75 per USD) when the interest rate differential is positive (HIBOR > LIBOR).

In their recent working paper "Nonbank Lending", economists Sergey Chernenko, Isil Erel, and Robert Prilmeier provided an insightful overview of the sources and terms of private debt financing during the post-crisis period.

A spread of over 3.5 percentage points between US and Hong Kong Interest rate persisted for close to two months and so far arbitrage has failed to close the gap, leading to discussion of whether Hong Kong's Linked Exchange System is failing. This article, however, will explore some technical factors behind this interesting interest rate gap.

The faster the credit growth, the worse it is for real growth (output per worker). This is what Stephen G. Cecchetti and Enisse Kharroubi want to explain in their NBER working paper "Why Does Credit Growth Crowd Out Real Economic Growth?"

The Fiscal Theory of the Price Level says that money has value because the government accepts it for taxes, and inflation is fundamentally a fiscal phenomenon

"The [Standing Repo Facility (SRF)] rate is set at the top of the FOMC’s target range for the federal funds rate. This combination of an ample supply of reserves and an SRF rate at the top of the target range reduces the day-to-day reliance on the facility except during periods of significant upward pressure on rates resulting from strong liquidity demand or market stress," said John Williams

Gauti B. Eggertsson, Manuel Lancastre, and Lawrence H. Summers explain in their paper "Aging, Output Per Capita and Secular Stagnation" the role of aging in the Secular Stagnation model.