It isn’t resolved. It’s an asset swap that gives the bank free income. Fractional reserve banking is a myth. All deposits come from banks making loans. They ar

It isn’t resolved. It’s an asset swap that gives the bank free income. Fractional reserve banking is a myth. All deposits come from banks making loans. They are the balancing item on the balance sheet. Banks make loans until they run out of creditworthy customers prepared to pay the current price of money. However government payments effectively force banks to make loans to the Fed on terms dictated by the Fed. All a reverse repo is, is the Fed offering alternative terms for that loan for a day.