Large-scale asset purchases by the Federal Reserve as well as new Basel III banking regulations have led to important changes in U.S. money markets. Most notably the interbank market has essentially disappeared with the dramatic increase in excess reserves held by banks. We build a model in the...

This paper describes segregated balance accounts (SBAs), a concept for a new type of account that could provide increased competition for deposits, reduce system-wide balance sheet costs, and improve the transmission of monetary policy by facilitating greater pass-through of interest on excess...

Methods of monetary policy implementation continue to change. The level of reserve supply-scarce, abundant, or somewhere in between-has implications for the efficiency and effectiveness of an implementation regime. The money market events of September 2019 highlight the need for an analytical...

Methods of monetary policy implementation continue to change. The level of reserve supply - scarce, abundant, or somewhere in between - has implications for the efficiency and effectiveness of an implementation regime. The money market events of September 2019 highlight the need for an...

Methods of monetary policy implementation continue to change. The level of reserve supply - scarce, abundant, or somewhere in between - has implications for the efficiency and effectiveness of an implementation regime. The money market events of September 2019 highlight the need for an...

Large-scale asset purchases by the Federal Reserve as well as new Basel III banking regulations have led to important changes in U.S. money markets. Most notably, the interbank market has essentially disappeared with the dramatic increase in excess reserves held by banks. We build a model in the...

The events from the 2007-2009 financial crisis have raised concerns that the failure of large financial institutions can lead to destabilizing fire sales of assets. The risk of fire sales is related to exemptions from bankruptcy's automatic stay provision enjoyed by a number of financial...

We offer a parsimonious model of the reserve demand to study the tradeoffs associated with various monetary policy implementation frameworks. Prior to the 2007-09 financial crisis, many central banks supplied scarce reserves to execute their interest-rate policies. In response to the crisis,...