Large Bank Examination Workshop February 2026

Collateral - Sources of Liquidity

• Repos • Federal Home Loan Bank Advances • Federal Reserve discount window borrowing • Public deposits

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Fire Sale Risk • Fire Sale: The forced sale of an asset at a dislocated price. Price dislocation typically occurs if a large amount of assets is sold in a short period of time.* • Two Types:  Pre-default fire sales by dealer to generate liquidity-likely insufficient to cover short-term funding needs  Post-default fire sales by repo investors after a dealer’s default. 96 *Fed Staff Report #616, May 2013: The Risk of Fire Sales in the Tri-Party Repo Market p5

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