Keeping you up to date on the latest data releases.
Payments were made by all three Maiden Lane vehicles on their outstanding loans this month, but Maiden Lane II continues to pay down its outstanding loan at a relatively rapid pace. The Maiden Lane portfolios were also revalued according to second-quarter security prices. Maiden Lane I showed almost no movement, but both Maiden Lane II and Maiden Lane III saw declines in their portfolio values. Maiden Lane II dropped from $11.3 billion to $10.2 billion, and Maiden Lane III dropped from $23.2 billion to $21.5 billion. Both portfolios are still expected to be profitable for the Fed.
A Term Deposit auction in the middle of July was met with much less demand than previous auctions, garnering a bid-to-cover ratio of just 1.26. The New York Fed announced that it would be accepting applications for a new set of reverse repo counterparties, this time allowing banks and savings associations into the mix. Perhaps the biggest requirement is a reserve balance of no less than $10 billion.
There seemed to have been some strange moves related to the debt ceiling debate as well. In the latter half of July, the Treasury’s General Account spiked, its Supplemental Financing Account dropped down to $0, and the balance of deposits at Federal Reserve banks from government-sponsored enterprises rose to an all-time high, topping $56 billion. In spite of these shifts and the downgrade of U.S. debt by Standard and Poor’s, the Federal Reserve Board announced that it will make no change in the treatment of any type of government-backed debt in its risk-weighting. Perhaps another sign of turmoil in the financial markets, this time in Europe, was a jump in foreign official and international accounts reverse repurchase agreements, which hit their highest mark since early 2009.