January 17, 2020 / 3:11 PM / a month ago

Fed's Harker says central bank should be backstop for liquidity, not first stop

SOMERSET, N.J. (Reuters) - Philadelphia Federal Reserve Bank President Patrick Harker said Friday the central bank’s interventions in money markets are temporary and that the creation of a potential standing repo facility is still “debatable.”

The policymaker said the Fed should not “disintermediate” the private market by becoming the first stop for firms in need of liquidity. “We want to do this in a way where we are a backstop,” Harker said after delivering remarks at a meeting of bankers in Somerset, New Jersey.

Reporting by Jonnelle Marte; Editing by Chizu Nomiyama

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