Fed Issues Proposal Aimed at Improving Intraday Liquidity Management

The Federal Reserve today asked for comments on proposed changes to its payments system risk policy that would expand access to collateralized intraday credit from the Federal Reserve Banks. The proposal is aimed at improving intraday liquidity management and payment flows while assisting the reserve banks in managing intraday credit risk.

The proposed changes also seek to clarify the terms for accessing uncollateralized intraday credit and the circumstances under which an institution may remain eligible for uncollateralized capacity if its holding company or affiliate is assigned a low supervisory rating.

The changes will also align the Fed’s payments system risk and overnight overdraft policies with the deployment of FedNow, the Fed’s real-time payments network. Comments are due 60 days after publication in the Federal Register.