(Reuters) -New York Federal Reserve President John Williams met with Wall Street banks this week to discuss a key short-term lending facility, a New York Fed spokesperson told Reuters. "President Williams convened the New York Fed's primary trading counterparties (primary dealers) to continue engagement on the purpose of the standing repo facility as a tool of monetary policy implementation and to solicit feedback that ensures it remains effective for rate control," the spokesperson said. Roberto Perli, the official responsible for implementing monetary policy, said on Wednesday that firms needing to use the central bank's standing repo facility should tap it when needed, adding that large-scale usage would not be problematic. The Financial Times first reported on the meeting, which took place on the sidelines of the Fed's annual Treasury market conference on Wednesday. Ahead of the Fed's policy meeting in October, rising money market rates, an upward drift of the federal funds rate and use of the SRF all signaled tightening market liquidity. The SRF allows eligible financial firms to turn bonds into cash quickly and acts as a shock absorber for market liquidity needs. Adopted in 2021, the tool had until late mostly gone unused. While its use in late October was notable, it was less than some had expected, and some Fed officials have said they were perplexed that more firms did not tap the SRF but instead borrowed from markets at higher rates than those offered by the Fed. (Reporting by Bipasha Dey and Mrinmay Dey in Bengaluru; Additional reporting by Preetika Parashuraman; Editing by Diane Craft, William Mallard and Andrea Ricci)
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