Banks posting a variety of assets as collateral with Fed

February 25th, 2008 | Category: Federal Reserve, Economic Data

More than half the collateral backing cash advances made by the U.S. Federal Reserve to U.S. banks is in the style of loans, not securities, the Federal Reserve Bank of New York told The Financial Times.

Economists and analysts had speculated that banks would post only complex housing-related securities — including mortgage-backed securities — that they could not refinance elsewhere.

That has not been the case. The Federal Reserve Bank of New

York told FT that since the credit crisis began, banks had continued to supply a wide variety of assets as collateral — including U.S. Treasuries, other government and agency-backed securities, and private-label mortgage-backed securities.

Continue reading Banks posting a variety of assets as collateral with Fed

Original post by Joseph Lazzaro

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