Ben Craig focuses primarily on the economics of banking and worldwide finance.
To get e-mail each time a brand new financial commentary is published, subscribe.
The federal funds market was a market in which domestic commercial banks with excess reserves would lend funds overnight to other commercial banks with temporary shortfalls in liquidity before the financial crisis. Just exactly exactly What has occurred for this market considering that the financial meltdown? Although the bank system was awash in reserves plus the federal funds price happens to be near zero, the market has proceeded to work, nonetheless it has changed. Various organizations now participate. Government-sponsored enterprises including the Federal Residence Loan Banks loan funds, and foreign commercial banking institutions borrow.