How Central Banks Use Triparty Repo for Liquidity

Monetary Policy Explained with Fexingo: Central Banks, Money Supply, and Interest Rates · Jun 20, 2026 · 7m · transcript

Episode 63 of Monetary Policy Explained with Fexingo drills into triparty repo—the plumbing the Fed and other central banks use to inject or drain liquidity through the repurchase agreement market. Lucas and Luna break down how triparty repo differs from traditional bilateral repo, why it became a key tool during the 2023 regional banking stress, and how the Fed's Standing Repo Facility uses it to keep short-term rates anchored. They walk through a concrete example: a dealer needing cash to settle a Treasury trade, turning to a triparty agent like BNY Mellon or JPMorgan Chase, and how…