2 We know from many decades of experience with monetary policy that, when the economy is operating below its potential, easier financial conditions tend to promote more rapid economic growth.
14 Demand for collateral securities may be further amplified by incoming regulation, for example by the moving of over-the-counter derivatives trading towards central counterparties. 15 Concerns regarding reduced availability of collateral are evident in specific segments of the repo market. For example, term repo in German collateral for maturities longer than three months has traded below the deposit facility recently, at around -25 bps.