Sentences with phrase «few excess reserves»

Because banks held few excess reserves, it took only modest adjustments to the size of the Fed's balance sheet, achieved by means of open - market purchases or sales of short - term Treasury securities, to make credit more or less scarce, and thereby achieve the Fed's immediate policy objectives.

If the Fed doesn't raise the interest on reserves rate, I suspect banks would be willing to lend more, leaving fewer excess reserves at the Fed, which could stimulate more inflation.

Not exact matches

With fewer claims being made on their reserves, some of their reserves that were previously «desired reserves» are now seen as «excess reserves,» and Banking Rule # 1 is in play: these now excess reserves can be lent out in the form of a larger supply of bank liabilities (most likely in the form of new deposits granted to borrowers).

Combined with a near - zero federal funds rate, that policy drove the level of excess reserves to unprecedented levels, meaning that few institutions had a need to borrow to make up a shortfall.