The market for repurchase agreements, or repos, also played a prominent role in transmitting risk during the crisis. The Federal Reserve is working to improve the infrastructure arrangements in the triparty repo market and is exploring what other steps should be taken to improve the stability of this key funding market.
Given the important role played by financial market infrastructures, we support the current legislative provisions that would help ensure that payment, clearing, and settlement systems – including central counterparties – are subject to robust and consistent risk-management standards and do not pose dangers to the financial system as a whole.