Barclays Plc has expressed concerns about the effectiveness of the Federal Reserve"s Standing Repo Facility (SRF) in stabilizing overnight funding markets during potential turmoil.
The SRF, which allows eligible banks and primary dealers to borrow funds overnight against Treasury and agency debt, may not be sufficient to support the entire repo market without necessary upgrades.
Barclays suggests that without improvements, the SRF may struggle to contain future disruptions in the funding markets, leaving them vulnerable during periods of increased volatility.