The federal funds rate: the market for bank reserves (video 1 of 4)
Video Overview & Insights
This video explains the basics of the market for bank reserves. The other three videos in the series explain how the Fed changes the federal funds rate.
can someone explain why demand curve is downward sloping
Thanks for watching!
HI, thanks for uploading this video. Just wondering, why is it that Rs= Non borrow reserve ( through OMO) + borrowed reserve (Discountwindow) = Rs. Wouldnt Rs also include money created through the money creation process ( I am not sure if i am misunderstanding something)
More User Perspectives
I have a question now reserve ratio is "ZERO" so banks don't need to hold reserves to lend money and basically every new loan fund itself by creating deposit.So why bank should hold reserves now? Banks only need reserves now when loan taker sends that loan to another bank and at that time bank needs reserves to settle that transaction between themselves. That too insufficient bank can take loan for reserves from bank with ample reserves.
@shubhamsingla9340Good explanation ! I have one question pls, the X axis of the graph says "reserves", what exactly are those reserves? the reserves of the FED , the reserves that central banks have to hold or what?
@carlosquitosantillan4356Thank you for uploading the video. Could you provide me with the source where I can find historical federal funds rate?
@emiliaborko7016Treasury and federal funds market compete for reserves.
@shubhamsingla9340Thank you for making these!
@relganz4663Thanks.. clear explanation in short time
@chhandamachhangte655Thanks a million ! Sir !
@MZtaeyeon1992Thanks for uploading these videos. It is very helpful for understanding the current market and your teaching is straight forward and clear.
@Kevueen