Solvency = credit risk in this case. If my counterparty doesn't pay me back, I can just liquidate the collateral which in this case are Treasuries. Given that t

Solvency = credit risk in this case. If my counterparty doesn't pay me back, I can just liquidate the collateral which in this case are Treasuries. Given that these are overnight transactions, I'm probably not exposed to too much price volatility if I had to. People aren't worried about getting their money back. There just isn't enough money floating around to lend out.