, financial stability report ( washington : board of governors, november ), https : / / www. federalreserve. gov / publications / 2020 - november - financial - stability - reportpurpose. htm. see the committee ’ s march 23, 2020, postmeeting statement ( quoted text in paragraph 2 ), which is available on the board ’ s website at https : / / www. federalreserve. gov / monetarypolicy / fomccalendars. htm. see lorie logan ( 2020 ), “ treasury market liquidity and early lessons from the pandemic shock, ” speech delivered at the brookings - chicago booth task force on financial stability ( tffs ) meeting, held via videoconference, october 23, https : / / fedinprint. org / item / fednsp / 88983. - 7been suggested to strengthen the resilience of the treasury market. for instance, further improvements in data collection and availability have been recommended to enhance transparency related to market participants, such as broker - dealers and hedge funds. some have suggested that the federal reserve could provide standing facilities to backstop repos in stress conditions, possibly creating a domestic standing facility or converting the temporary foreign and international monetary authorities ( fima ) repo facility to a standing facility. 9 other possible avenues to explore include the potential for wider access to platforms that promote forms of “ all to all ” trading less dependent on dealers and, relatedly, greater use of central clearing in treasury cash markets. 10 these measures involve complex tradeoffs and merit thoughtful analysis in advancing the important goal of ensuring treasury market resilience. offshore dollar funding markets the global dash for cash also led to severe stress in offshore dollar funding markets, where foreign exchange swap basis spreads increased sharply to levels last seen in the global financial crisis. foreign banking organizations serve as key conduits of dollar funding for foreign governments, central banks, businesses, nonbank financial institutions, and households. 11 see board of governors of the federal reserve system ( 2020 ), “ federal reserve announces establishment of a temporary fima repo facility to help support the smooth functioning of financial markets, ” press release, march 31, https : / / www. federalreserve. gov / newsevents / pressreleases / monetary20200331a. htm ; and board of governors of the federal reserve system ( 2019 ), “ minutes of the federal

crisis. signs of acute stress were readily apparent in intermediaries and vehicles with structural funding risk, particularly in prime money market funds ( mmfs ). indeed, it appears these vulnerabilities had increased, as assets held in prime mmfs doubled in the three years preceding last march. when the covid shock hit, investors rapidly moved toward cash and the safest, most liquid financial instruments available to them. over the worst two weeks in mid - march, net redemptions at publicly offered institutional prime mmfs amounted to 30 percent of assets. this rush of outflows as a share of assets was faster than in the run in 2008, and it appears some features of the money funds may have contributed to the severity of the run. 2 the run in march forced mmfs to rapidly reduce their commercial paper holdings, which worsened stress in short - term funding markets. funding costs for borrowers shot up, and the availability of short - term credit at maturities beyond overnight plunged. these markets provide the short - term credit many businesses need to keep operating and meet payrolls. so when shortterm funding markets shut down, it can imperil many businesses, too. for the second time in 12 years, a run on mmfs triggered the need for policy intervention to mitigate the effect on financial conditions and the wider economy. to head off the risk of widespread business failures and layoffs, the federal reserve took a number of actions, including announcing the commercial paper funding facility on march 17 and the preliminary research by federal reserve staff has found that investor withdrawals accelerated as prime funds ’ liquidity levels fell close to the 30 percent weekly liquid assets threshold, where these funds can impose redemption fees or suspend redemptions temporarily. see lei li, yi li, marco macchiavelli, and xing ( alex ) zhou ( 2020 ), “ liquidity restrictions, runs, and central bank interventions : evidence from money market funds, ” working paper. - 3money market mutual fund liquidity facility on march 18, 2020. following the announcement of these facilities, prime mmf redemptions slowed almost immediately, and other measures of stress in short - term funding markets began to ease. the march 2020 turmoil highlights the need for reforms to reduce the risk of runs on prime money market funds that create stresses in short - term funding markets. the president ’ s working group on financial markets has outlined several potential reforms to address this risk, and the securities and exchange commission recently requested comment on