Finance and Economics Discussion Series (FEDS)
November 2025
Central Bank Access and Flight to Safety
Lucia Gurrieri, Chase Ross, Ben Schmiedt, Alexandros P. Vardoulakis, and Vladimir Yankov
Abstract:
We examine whether access to the Federal Reserve's Overnight Reverse Repo Facility (ON RRP) affects money market fund flows during flight-to-safety episodes. We find that funds with ON RRP access serving sophisticated investors experience about a 1 percentage point increase in net daily flows over total assets during the March 2020 flight-to-safety episode relative to similar funds without access. The effect aligns with theoretical predictions and explains more than half of the inflows in those funds. Our results show that access to central bank deposit facilities amplifies flight-to-safety behavior.
Keywords: central bank account access, flight-to-safety, Regulation D
DOI: https://doi.org/10.17016/FEDS.2025.100
PDF: Full Paper
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