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That’s not how reserves work. In the US they can only be deposited at the Federal Reserve (the corresponding regional branch, in fact).
by kgwgk 7y ago
That’s not how reserves work. In the US they can only be deposited at the Federal Reserve (the corresponding regional branch, in fact).
- ajross 7y agoNot understanding the point. Money is fungible. If a bank gets $100 from somewhere, it has to deposit $10 to the corresponding regional branch of the Federal Reserve, but so what? There's no tracking of those specific dollars. They can deposit the ones they got that are "known" to be unreserved cash holdings or they can deposit ones that they just got from a wire transfer from a credit account issued by another bank. The feedback loop is the point, and it remains.