Academic journal article The Reserve Bank of New Zealand Bulletin

Some Temporary Crisis Liquidity Facilities to Be Removed

Academic journal article The Reserve Bank of New Zealand Bulletin

Some Temporary Crisis Liquidity Facilities to Be Removed

Article excerpt

14 October 2009

The Reserve Bank announced today that it will be removing and consolidating some of the temporary emergency liquidity facilities put in place during the financial crisis in 2008.

The specific measures include:

* The removal of the Term Auction Facility (TAF) where banks have been able to borrow funds for 3, 6 and 12 months using eligible collateral (such as Residential Mortgage Backed Securities (RMBS), registered bank bills, NZ Government securities etc).

* A change to the regular Tuesday Open Market Operation (OMO) to allow all eligible securities (including corporate securities and RMBS) to be acceptable collateral for repurchase transactions of maturity up to three months. Currently, only approved Corporate and Asset-backed securities are acceptable as collateral in this OMO for terms of up to two months. The regular weekly OMO will continue until the end of March 2010 when it will be reviewed with a view to discontinuing it if market conditions allow.

* A shortening of the maximum term over which funds may be borrowed from the Bank in the Overnight/Term Reverse Repo Facility (ORRF/TRRF) from one month to an overnight basis only. All currently approved eligible collateral (including corporate securities and RMBS) will remain acceptable in the ORRF. …

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