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The Borrower of Last Resort : What Explains the Rise of ON RRP Facility Usage?, No. 21-43

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The Borrower of Last Resort : What Explains the Rise of ON RRP Facility Usage?, No. 21-43

DATE: December 2021

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ABSTRACT: This article explains why the Fed has been borrowing more than $1.4 trillion from its borrower-of-last-resort facility: the Overnight Reverse Repo. We compare the roles of five channels potentially driving Fed borrowing (such as saving glut, quantitative easing, regulation, etc.) and find that one channel — the Treasury General Account drawdown — is associated with most of the current usage. We also find this channel's impact could be partially moderated if the Fed tapers quantitative easing accordingly.


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Kirk, Kyler , Wong, Russell and Federal Reserve Bank of Richmond. "The Borrower of Last Resort : What Explains the Rise of ON RRP Facility Usage?, No. 21-43," Economic Brief (December 2021). https://fraser.stlouisfed.org/title/6034/item/610443, accessed on October 3, 2023.

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