Expanded Access to the Standing Facility
MAS introduced the Standing Facility in June 2006 to allow banks to improve day-to-day liquidity management by providing a channel to place excess funds with, or to borrow from, MAS directly. The Standing Facility helps to moderate intra-day volatility in overnight interbank rates as banks are better able to avoid any undue scrambling to square large and potentially destabilising positions in the market. The Standing Facility also helps to boost market confidence by giving banks the assurance that liquidity needs in the banking system would be met in times of unusual volatility.
The Standing Facility was initially open to the 11 Primary Dealers of Singapore Government Securities (SGS), who could borrow from it against SGS collateral. In July 2008, MAS announced that we would expand the Standing Facility to all participants of the new MAS Electronic Payment System (MEPS+) that had entered into the Public Securities Association / International Securities Market Association (PSA/ISMA) Global Master Repurchase Agreement with the Authority.
Looking ahead, MAS is also working on expanding the eligibility criteria of financial institutions and collateral if the need arises. These are in line with international best practice recommendations by the Financial Stability Forum2 (FSF).