Dallas Federal Reserve President Logan said the Federal Open Market Committee
using a voluntary central clearing mechanism for open market operations would
improve operational efficiency and effectiveness and bolster US financial-market
stability. She said such arrangements could increase use of Fed tools, including
the standing repo facility, which is intended to supply liquidity to eligible
institutions but has seen low market take-up; simplifying clearing could raise
its appeal, some participants say. Logan also urged careful management of market
leverage, stressing the need to balance leverage-driven returns against risks
and to preserve an appropriate leverage–liquidity trade-off.
