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Except that it’s opt in based on liquidity needs, which is very different than tightening.

• testfoobar 5y ago
  It isn't exactly tightening. But the RRP facility does drain liquidity in 24 hour segments. It presents an interesting risk. Here is a quote from a paper at the Federal Reserve itself from 2015: https://www.federalreserve.gov/econresdata/feds/2015/files/2015010pap.pdf https://www.federalreserve.gov/econresdata/feds/2015/files/2... "However, a facility that could allow a very rapid and unexpected expansion of ON RRP might exacerbate disruptive flight-to-quality flows during a period of financial stress and thus could undermine financial stability. Market observers and policymakers both have described such risks. For example, the Minutes of the June 2014 FOMC meeting state that “[m]ost participants expressed concerns that in times of financial stress, the facility’s counterparties could shift investments toward the facility and away from financial and nonfinancial corporations, possibly causing disruptions in funding that could magnify the stress” (FOMC 2014a). "