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Illya Gerasymchuk
Entrepreneur / Engineer
User Illya Gerasymchuk -

2025-07-31 10:10

since banks can always deposit cash into their reserve account account at the FED and earn the IORB rate they have little incentive to lend at rates below IORB effectively, this sets the floor (lower bound of the corridor) for interest rates for banks

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Interest on Reserve Balances (IORB) is the rate FED pays banks on their excess reserves commercial banks have reserve accounts at the FED. regulations define the minimum amounts - any excess earns the IORB interest rate set by the FED

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