Traders resisted the New York Fed's lending facilities, hindering the Fed's efforts to ease pressure in the repo market.

Mars Finance reported on November 19th that, according to foreign media reports, traders rejected the New York Federal Reserve's suggestion to use lending facilities to ease market tensions. Bond traders resisted the Fed officials' urging for the use of key lending facilities, further complicating the Fed's efforts to ease pressure on the $12 trillion repurchase market. Sources revealed that at a meeting last week, major dealers representing Wall Street banks told officials that borrowing directly from the central bank still carried a certain stigma risk and could be seen as a signal of problems. This is one reason why they were reluctant to use the Standing Repurchase Facility (SRF). Others pointed to operational and balance sheet limitations that made access to the tool difficult.