Bundesbank research warns of risks from rising intraday interest rates
Higher rates seem to imply repo markets are charging a liquidity premium
A discussion paper published today (July 31) by the Deutsche Bundesbank finds repo markets are increasingly charging a premium for intraday liquidity, which could impact the efficiency of financial markets.
The intraday interest rate – what's that? by Puriya Abbassi, Falko Fecht and Johannes Tischer notes central banks have generally provided an intraday overdraft facility at low or zero interest rates to encourage banks not to send all their payments in the final few minutes of trading.
However
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