The Federal Funds Market since the Financial Crisis

Ben Craig and Sara Millington

Economic Commentary, 2017, issue April

Abstract: Before the financial crisis, 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. What has happened to this market since the financial crisis? Though the banking system has been awash in reserves and the federal funds rate has been near zero, the market has continued to operate, but it has changed. Different institutions now participate. Government-sponsored enterprises such as the Federal Home Loan Banks loan funds, and foreign commercial banks borrow.

Keywords: Financial Crisis; Federal Funds Market (search for similar items in EconPapers)
Date: 2017
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