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A comment on New York Fed Again Upsizes Liquidity Plans for Turn of the Year. Parent comment

Re:New York Fed Again Upsizes Liquidity Plans for Turn of th... by samsolomon on Wednesday December 18, 2019 @01:59PM (#21828031)
I'm also interested why the FED would want to do this. Could it be to maintain interest rates at a certain target? If the banks don't have money to lend, would it cause them to charge higher interest on their loans?
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Re:New York Fed Again Upsizes Liquidity Plans for Turn of th... by PeterStuer on Wednesday December 18, 2019 @02:17PM (#21828237)
Banks don't actually need money to lend money. They just create a loaned amount credit in one account and a corresponding asset consisting of a future revenue stream on the other side.

The cash reserve is just a collateral against the risk, needed to stabilize public trust they will not default at the slightest ill wind.

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