Questions tagged [federal-reserve]

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46 votes
7 answers
12k views

Why would a bank need to accept deposits from private clients if it can just borrow from the Federal Reserve?

As far as I understand, all banks can borrow money from the Central Bank (Federal Reserve in the US) and the rates are (currently) extremely low (or even negative in some cases). If that is so, why ...
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10 votes
2 answers
9k views

Why is a coin an asset whereas a note is a liability on the Federal Reserve's balance sheet? [closed]

Can someone explain me why coins are assets and notes are liabilities for the U.S. Federal Reserve? I know coins are made from "precious" metals, but even notes are made from various materials too, ...
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4 votes
2 answers
324 views

what is the possibility of USA having negative interest rate [closed]

There has been attempt at reducing the interest rates. Apart from, elderly and savers depend on the bank interest and Stock market is driven by interest rates, the true cost of money if becomes ...
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  • 3,397
3 votes
2 answers
540 views

Why are bank rates based on the federal interest rate?

From what I have read, the Federal Reserve sets the "key rate", which is the rate at which banks can borrow money from the Reserve. However, I don't understand why both mortgage lending rates and ...
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1 vote
2 answers
512 views

Deposit Reclassification

My last statement from a given bank contained the following notice: Deposit Reclassification: Under federal law, the Bank is required to classify our deposits a certain way for regulatory banking ...
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