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Fed's Logan says Fed open market operations would benefit from voluntary central clearing
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Fed's Logan says Fed open market operations would benefit from voluntary central clearing
Jul 9, 2026 11:00 AM

NEW YORK, July 9 (Reuters) - Federal Reserve Bank of Dallas President Lorie Logan said on Thursday a shift to central clearing in central bank monetary policy operations would likely be a benefit to the financial system.

The interest-rate setting Federal Open Market Committee "could make its open market operations more efficient and effective, and support the strength of U.S. markets more generally, by centrally clearing its operations on a voluntary basis," Logan said at a conference held by the New York Fed on market liquidity issues.

Logan's comments were relatively limited and did not address the monetary policy and economic outlook. The official, who implemented monetary policy at the central bank before taking charge of the Dallas Fed, was referring to facilities the central bank uses to achieve its monetary policy goals, like standing repo operations, which lend cash as desired to eligible firms.

Standing repos are a key part of how the Fed ensures money market rates trade at desired levels but have been lightly used despite the Fed encouraging the tool's usage. Some believe a more straightforward clearing process would make things like standing repo operations more attractive.

Logan also said in her remarks that borrowing levels in markets need to be carefully managed.

"Maintaining strong and efficient financial markets requires both market participants and the official sector to appropriately balance the benefits and risks of leverage and its interaction with market liquidity," Logan said.

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