Lael Brainard: The structure of the treasury market - what are we learning?

Speech by Ms Lael Brainard, Member of the Board of Governors of the Federal Reserve System, at "The Evolving Structure of the U.S. Treasury Market" Fourth Annual Conference, hosted by the Federal Reserve Bank of New York, New York City, 3 December 2018.

The views expressed in this speech are those of the speaker and not the view of the BIS.

I am pleased to join the fourth annual conference on the evolving structure of the U.S. Treasury market. Four years ago, the Treasury "flash rally" served as a wake-up call for regulators and market participants alike that the structure of the Treasury market had changed radically from the conventional view. Since the surprising sharp spike in Treasury prices on October 15, 2014, the public sector has devoted significant effort and resources to monitoring the ongoing changes in the Treasury market. The interagency working group's (IAWG) Joint Staff Report on the events of October 15, the Treasury Department's request for information on the report's recommendations, and the subsequent collection of transactions data by the Financial Industry Regulatory Authority (FINRA) through its Trade Reporting and Compliance Engine (TRACE) system have offered us a much better understanding of this market.