- The Federal Reserve has launched a standing securities-lending facility for money-market funds.
- Funds can borrow against central-bank reserves and Treasury collateral to conduct securities-lending activity.
- The facility is permanent, not temporary.
- The goal is to prevent a repo market breakdown by providing a reliable backstop for money-fund lending.
- BULL CASE: The facility is limited to Treasury collateral and strict margin rules; it extends existing standing repo facilities safely.
- BEAR CASE: Critics argue it makes central-bank reserves effectively available as collateral for risky market-making, blurring the line between liquidity provision and bailout.
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BORSAPLUSWhy it matters · Bull and bear case · Reaction against SPY and the sector · What to watch
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