Graph and download economic data for Overnight Repurchase Agreements: Treasury Securities Purchased by the Federal Reserve in the Temporary Open Market Operations (RPONTSYD) from 2000-01-03 to 2026-02-19 about repurchase agreements, purchase, overnight, trade, Treasury, securities, and USA.
Reserves are what are used by banks when you transfer money from one bank to another, when Treasury tells you to give certain account money (social security, Gov payments in general) or when you withdraw cash (since cash is a Government liability, not bank liability).
The clearing balances (aka reserves) are held at the Fed, it’s Government’s liability. Banks can only clear debts between one another using a higher up liability (and that’s Gov).
Banks don’t need reserves, they need what is known as HQLA (High Quality Liquid Assets) which includes Treasuries. These can then be presented to the Fed or in the interbank market for reserves if needed.
But since they shoved so much reserves, maintaining interest rate by paying interest on reserves, these windows had been very quiet.
Thanks for that. So why might a bank need so much reserves? Just clearing unusually large balances?
Reserves are what are used by banks when you transfer money from one bank to another, when Treasury tells you to give certain account money (social security, Gov payments in general) or when you withdraw cash (since cash is a Government liability, not bank liability).
The clearing balances (aka reserves) are held at the Fed, it’s Government’s liability. Banks can only clear debts between one another using a higher up liability (and that’s Gov).
Banks don’t need reserves, they need what is known as HQLA (High Quality Liquid Assets) which includes Treasuries. These can then be presented to the Fed or in the interbank market for reserves if needed.
But since they shoved so much reserves, maintaining interest rate by paying interest on reserves, these windows had been very quiet.
See https://billmitchell.org/blog/?p=13078