What is Bond for Bond Lending?
A lending structure used in the Federal Reserve’s security lending facility, whereby borrowers receive a loan of bonds, by using all or a portion of their own portfolio of bonds for collateral. The bond for bond lending structure is different from the traditional cash for bond lending structure, in which the borrower takes the funds as cash instead. Read more for examples and further explanation including related video clips and also comments
Example explains Bond for Bond Lending
The bond for bond lending structure is sometimes preferable because it can allow for better cash management for the lender. The Federal Reserve sometimes uses this structure to help minimize the impact on the aggregate level of cash available in the banking system.
[tubepress mode=’tag’, tagValue=’Bond for Bond Lending invest’]