2018-02-21

Fed Response on Interbank Loans

The Fed has answered: Fed loans to banks are part of total Fed funds and effectively lost in a sea of data, but a part of it exists in loans to commercial banks.

What's more interesting is the death in interbank lending after the 2008 crisis. And based on the relative size of Fed funds and loans to commercial banks, if there was a drop of interbank lending it was the Fed reducing liquidity rather than a drop in bank-to-bank lending.

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