A number
of operational features were required to implement such an
overnight reverse repo, or ON RRP, facility: It would need same - day settlement; 16 the operation would need to be run predictably, every day, and as late in the day as possible, to give lenders time to bargain with other counterparties using the outside option
of investing with the Federal Reserve; 17 an appropriate spread below IOR would be required to ensure that the facility neither induced large changes in the structure
of money markets nor lost the ability to support interest rate
control; 18 and the operations would need enough unused capacity that lenders could credibly propose to leave borrowers that did not offer an adequate interest rate.19