Fed funds: Difference between revisions
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imported>John Grout m (To add clarification on federal funds rate - a term often used loosely or made a defined term in loan agreements) |
imported>Doug Williamson (Layout.) |
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''US | ''US banking''. | ||
Funds ("Federal funds") deposited by commercial banks at Federal Reserve Banks, including funds in excess of bank reserve requirements. | Funds ("Federal funds") deposited by commercial banks at Federal Reserve Banks, including funds in excess of bank reserve requirements. | ||
Banks may lend federal funds to each other on an overnight basis to help the borrowing bank satisfy its reserve requirements or liquidity needs. This lending will be at the lender's "federal funds rate". The Federal Reserve calculates and publishes the "effective federal funds rate" [[EFFR]] as a weighted average of the reported transaction rates for each business day. | Banks may lend federal funds to each other on an overnight basis to help the borrowing bank satisfy its reserve requirements or liquidity needs. | ||
This lending will be at the lender's "federal funds rate". | |||
The Federal Reserve calculates and publishes the "effective federal funds rate" [[EFFR]] as a weighted average of the reported transaction rates for each business day. | |||
Revision as of 21:28, 23 June 2016
US banking.
Funds ("Federal funds") deposited by commercial banks at Federal Reserve Banks, including funds in excess of bank reserve requirements.
Banks may lend federal funds to each other on an overnight basis to help the borrowing bank satisfy its reserve requirements or liquidity needs. This lending will be at the lender's "federal funds rate". The Federal Reserve calculates and publishes the "effective federal funds rate" EFFR as a weighted average of the reported transaction rates for each business day.
