NY Fed paper assesses risk of fire sales in tri-party repo markets

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A staff report published by the Federal Reserve Bank of New York examines fire sales in tri-party repo markets, finding only some action can be taken before a default, but that it may be impossible to limit the damage after the event.

Brian Begalle, Antoine Martin, James McAndrews and Susan McLaughlin, authors of the paper The Risk of Fire Sales in the Tri-Party Repo Market, say that in situations where a dealer faces funding constraints and has to quickly liquidate positions, tools can be used

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