Borrowed reserves

Lecture International Economics - Chapter 17: International Banking: Reserves, Debt, and Risk. After studying this section will help you understand: nature of international reserves, supply of international reserves, foreign currencies, gold, special drawing rights,...

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Open market operations Affect the quantity of reserves and the monetary base Changes in borrowed reserves Affect the monetary base Changes in reserve requirements Affect the money multiplier Federal funds rate—the interest rate on overnight loans of reserves from one bank to another Primary indicator of the stance of monetary policy

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A first option for providing additional monetary accommodation, if necessary, is to expand the Federal Reserve’s holdings of longer-term securities. As I noted earlier, the evidence suggests that the Fed’s earlier program of purchases was effective in bringing down term premiums and lowering the costs of borrowing in a number of private credit markets. I regard the program (which was significantly expanded in March 2009) as having made an important contribution to the economic stabilization and recovery that began in the spring of 2009.

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For these firms, willingness to expand--and, in particular, to add permanent employees--depends primarily on expected increases in demand for their products, not on financing costs. Bank-dependent smaller firms, by contrast, have faced significantly greater problems obtaining credit, according to surveys and anecdotes. The Federal Reserve, together with other regulators, has been engaged in significant efforts to improve the credit environment for small businesses.

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Adverse Credit History. To be eligible for a Federal PLUS loan, the borrower may not have an adverse credit history, which is defined as having a bankruptcy, foreclosure, repossession, tax lien, wage garnishment or default determination in the last five years or a current delinquency of 90 or more days. Alternative Student Loan. See Private Student Loan. Asset.

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As the Basel Committee on Banking Supervision has pointed out, it has become increasingly important to look beyond the traditional earnings and economic value effects and assess indirect interest rate effects as well. Taking a broader view of the potential earnings impact of changing interest rates, banks also need to take into consideration the growing share of (interest-sensitive) fee- based fi nancial services (loan servicing, asset securitization programs, pay- ments etc.).

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The federal funds market also functions as the core of a more extensive overnight market for credit free of reserve requirements and interest rate controls. Nonbank depositors supply funds to the overnight market through repurchase agreements (RPs) with their banks. Under an overnight repurchase agreement, a depositor lends funds to a bank by purchasing a security, which the bank repurchases the next day at a price agreed to in advance. In 1991, overnight RPs accounted for about 25 percent of overnight borrowings by large commercial banks.

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Third, federal funds borrowed have historically been distinguished from other liabilities of depository institutions because they have been exempt from both reserve requirements and interest rate ceilings. 2 The supply of and demand for federal funds arise in large part as a means of efficiently distributing reserves throughout the banking system. On any given day, individual depository institutions may be either above or below their desired reserve positions.

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Three features taken together distinguish federal funds from other money market instruments. First, they are short-term borrowings of immediately available money—funds which can be transferred between depository institutions within a single business day. In 1991, nearly three-quarters of federal funds were overnight borrowings. The remainder were longer maturity borrowings known as term federal funds. Second, federal funds can be borrowed by only those depository institutions that are required by the Monetary Control Act of 1980 to hold reserves with Federal Reserve Banks.

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Banks and other depository institutions can also borrow on a short-term basis at the Federal Reserve discount window and pay a rate of interest set by the Federal Reserve called the discount rate. A bank's decision to borrow at the discount window depends on the relation of the discount rate to the federal funds rate, as well as on the administrative arrangements surrounding the use of the window. Banks also borrow funds in the money market for longer periods by issuing large negotiable certificates...

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The Federal Reserve plays an important role when the Treasury needs to raise money to f inance the government or to ref inance maturing Treasury securities. The Reserve Banks handle weekly, monthly, and quarterly auctions of Treasury securities, accepting bids, communicating them to the Treasury, issuing the securities in book-entry form to the winning bidders, and collecting payment for the securities. Over the past several years, the auction process has become increasingly automated, which further ensures a smooth borrowing process.

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In a second step, the bank needs to get the base money necessary for the credit expansion (note that empirically, banks have to fulfil their reserve requirements only ex post so they expand credit before getting the reserves necessary to back them). For simplicity, we assume a minimum reserve requirement of 100 per cent on deposits, so the bank needs to get 100 pesos in central bank reserves. If the bank is solvent and has sound marketable securities, it can borrow these reserves from the central bank either via the discount window or via open market...

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Similarly, most credit cards do not charge interest on any purchases if a borrower pays the entire balance due within a short one-month grace period, but do charge interest on all purchases if she revolves even $1. To protect borrowers, new regulations restrict these and other practices involving large penalties: in July 2008 the Federal Reserve Board severely limited the use of prepayment penalties, and the Credit CARD Act of 2009 prohibits the use of interest charges for partial balances the consumer has paid off, and restricts fees in other ways.

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Introduction to Good Usability An e-book by peterpixel .released under creative commons some rights reserved Peter Conradie (2008) .Contents Introduction Why Read it? Why Write it? In General Stick to the Rules Borrow You are Less Interesting Than you Think Interface Design Guides Breadcrumbs Tabs Linking Overlays Drop Down Menu Scroll Icons Content Titles Splash Screen Body Text Fonts Video Further Reading 4 4 4 5 5 5 5 6 6 7 8 11 13 14 15 16 16 16 17 17 18 20 .

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Thị trường tiền tệ chuyên về những hoạt động vay mượn và cho vay mượn (borrowing and lending) vốn ngắn hạn với chiều dài thời gian không hơn một năm. Thị trường tiền tệ vận dụng nhiều công cụ tài chính trong đó có những công cụ của thị trường tín dụng ngắn hạn (short-term credit market instruments), những công cụ của thị trường hàm phiếu (derivative market instruments) và cửa hàng cho vay của Ngân Hàng Trung Ương (Federal Reserve’s discount window)....

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