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Responses to the Financial Crisis, Treasury Debt, and the Impact on Short-Term Money Markets

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Listed:
  • Warren B. Hrunga

    (Federal Reserve Bank of New York)

  • Jason S. Seligman

    (John Glenn School of Public Affairs, The Ohio State University)

Abstract

The United States introduced several programs in response to the financial crisis. We examine responses involving Treasury debt—the Term Securities Lending Facility (TSLF), Supplementary Financing Program (SFP), Treasury issuance, open-market operations—and associated impacts on collateralized funding markets. We find the TSLF uniquely effective, due primarily to its introduction during the financial crisis. We find some evidence that the SFP helped alleviate funding market stress. This is notable, as the SFP actually drained bank reserves. Our results show that the proper policy response to a financial crisis can involve options beyond an increase in the level of bank reserves.

Suggested Citation

  • Warren B. Hrunga & Jason S. Seligman, 2015. "Responses to the Financial Crisis, Treasury Debt, and the Impact on Short-Term Money Markets," International Journal of Central Banking, International Journal of Central Banking, vol. 11(1), pages 151-190, January.
    • Handle: RePEc:ijc:ijcjou:y:2015:q:1:a:5
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy

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