(Reuters) – The Federal Reserve Bank of New York filled three senior roles on its market desk and financial services group, providing more certainty over the leadership and direction of the regional central bank during a critical time for markets.
Daleep Singh, a senior partner and chief U.S. economist at SPX Capital, a global investment firm, will become head of the markets group.
Lorie Logan, a veteran of the markets desk at the New York Fed, was named the manager of the System Open Market Account. Singh and Logan will take on new positions created to replace the role formerly held by Simon Potter, the head of the markets desk who departed abruptly in June.
Christopher Armstrong, who has spent more than a decade at the New York Fed, was made head of the financial services group. He replaces Richard Dzina, who also left the bank in June.
The appointments comes at a time of unusual tumult and anxiety in the overnight borrowing markets for cash. Traders have been on edge about money markets since mid-September when a liquidity squeeze caused the borrowing rate in the market for repurchase agreements, or repo, to jump to 10%, or more than four times the Fed’s target rate.
The New York Fed calmed markets by pumping billions of dollars of cash into the repo market through daily and longer-term operations. The Fed also started purchasing $60 billion a month in short-term Treasury bills, a balance sheet expansion program meant to raise the level of reserves in the banking system.
Some Wall Street firms fear there could be a repeat of the liquidity issues over the next couple of weeks when large amounts of corporate tax payments and Treasury settlements could drain reserves from the banking system, similar to the events that contributed to the volatility in September.
Fed Chair Jerome Powell said the pressures are “manageable” and said officials are ready to act as needed to keep markets stable.
On Thursday, the New York Fed announced it will increase the amount of liquidity it provides in daily and overnight repo operations during the critical year-end period.
Reporting by Jonnelle Marte; Editing by Tom Brown and Jonathan Oatis
LINK ORIGINAL: Reuters