Report
The diffusion of bank reserves in the U.S.
| Τίτλος: | The diffusion of bank reserves in the U.S. |
|---|---|
| Συγγραφείς: | Ennis, Huberto M.1 huberto.ennis@rich.frb.org, Wolman, Alexander L.1 alexander.wolman@rich.frb.org |
| Πηγή: | Working Papers Series (Federal Reserve Bank of Richmond). Sep2026, Vol. 26 Issue 12, p1-85. 85p. |
| Θεματικοί όροι: | *Bank reserves, *Markov processes, *Distribution (Probability theory), *Banking industry, *Federal Reserve banks, *Monetary policy |
| Γεωγραφικοί όροι: | United States |
| Εταιρία/Οντότητα: | Board of Governors of the Federal Reserve System (U.S.) |
| Περίληψη: | The Federal Reserve implements monetary policy using an ample reserves system, which does not require active management of the total quantity of reserves to maintain interest rate control. The distribution and the diffusion of reserves across banks, and groups of banks, is a key factor in determining the (minimum) ample level of reserves consistent with that objective. If large portions of the outstanding amount of reserves can become effectively "trapped" in segments of the banking system, then the total level of reserves needed to achieve the intended objective may be higher. We propose a Markovian framework to study the weekly flow of reserves across groups of banks between 2010 and 2024. We group banks according to types (foreign and domestic, large and small) and Fed districts. The diffusion process depends on how reserves flow in and out of the system. We compute counterfactuals which shed light on the way the distribution of reserves would adapt to plausible changes in conditions. In general, the distribution of reserves tends to be highly persistent during periods of abundant reserves, but redistribution intensifies when reserves reach lower (yet, still ample) levels. [ABSTRACT FROM AUTHOR] |
| Copyright of Working Papers Series (Federal Reserve Bank of Richmond) is the property of Federal Reserve Bank of Richmond and its content may not be copied or emailed to multiple sites without the copyright holder's express written permission. Additionally, content may not be used with any artificial intelligence tools or machine learning technologies. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.) | |
| Βάση Δεδομένων: | Business Source Index |
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| Items | – Name: Title Label: Title Group: Ti Data: The diffusion of bank reserves in the U.S. – Name: Author Label: Authors Group: Au Data: <searchLink fieldCode="AR" term="%22Ennis%2C+Huberto+M%2E%22">Ennis, Huberto M.</searchLink><relatesTo>1</relatesTo><i> huberto.ennis@rich.frb.org</i><br /><searchLink fieldCode="AR" term="%22Wolman%2C+Alexander+L%2E%22">Wolman, Alexander L.</searchLink><relatesTo>1</relatesTo><i> alexander.wolman@rich.frb.org</i> – Name: TitleSource Label: Source Group: Src Data: <searchLink fieldCode="JN" term="%22Working+Papers+Series+%28Federal+Reserve+Bank+of+Richmond%29%22">Working Papers Series (Federal Reserve Bank of Richmond)</searchLink>. Sep2026, Vol. 26 Issue 12, p1-85. 85p. – Name: Subject Label: Subject Terms Group: Su Data: *<searchLink fieldCode="DE" term="%22Bank+reserves%22">Bank reserves</searchLink><br />*<searchLink fieldCode="DE" term="%22Markov+processes%22">Markov processes</searchLink><br />*<searchLink fieldCode="DE" term="%22Distribution+%28Probability+theory%29%22">Distribution (Probability theory)</searchLink><br />*<searchLink fieldCode="DE" term="%22Banking+industry%22">Banking industry</searchLink><br />*<searchLink fieldCode="DE" term="%22Federal+Reserve+banks%22">Federal Reserve banks</searchLink><br />*<searchLink fieldCode="DE" term="%22Monetary+policy%22">Monetary policy</searchLink> – Name: SubjectGeographic Label: Geographic Terms Group: Su Data: <searchLink fieldCode="DE" term="%22United+States%22">United States</searchLink> – Name: SubjectCompany Label: Company/Entity Group: Su Data: <searchLink fieldCode="DE" term="%22Board+of+Governors+of+the+Federal+Reserve+System+%28U%2ES%2E%29%22">Board of Governors of the Federal Reserve System (U.S.)</searchLink> – Name: Abstract Label: Abstract Group: Ab Data: The Federal Reserve implements monetary policy using an ample reserves system, which does not require active management of the total quantity of reserves to maintain interest rate control. The distribution and the diffusion of reserves across banks, and groups of banks, is a key factor in determining the (minimum) ample level of reserves consistent with that objective. If large portions of the outstanding amount of reserves can become effectively "trapped" in segments of the banking system, then the total level of reserves needed to achieve the intended objective may be higher. We propose a Markovian framework to study the weekly flow of reserves across groups of banks between 2010 and 2024. We group banks according to types (foreign and domestic, large and small) and Fed districts. The diffusion process depends on how reserves flow in and out of the system. We compute counterfactuals which shed light on the way the distribution of reserves would adapt to plausible changes in conditions. In general, the distribution of reserves tends to be highly persistent during periods of abundant reserves, but redistribution intensifies when reserves reach lower (yet, still ample) levels. [ABSTRACT FROM AUTHOR] – Name: AbstractSuppliedCopyright Label: Group: Ab Data: <i>Copyright of Working Papers Series (Federal Reserve Bank of Richmond) is the property of Federal Reserve Bank of Richmond and its content may not be copied or emailed to multiple sites without the copyright holder's express written permission. Additionally, content may not be used with any artificial intelligence tools or machine learning technologies. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract.</i> (Copyright applies to all Abstracts.) |
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| RecordInfo | BibRecord: BibEntity: Languages: – Code: eng Text: English PhysicalDescription: Pagination: PageCount: 85 StartPage: 1 Subjects: – SubjectFull: Bank reserves Type: general – SubjectFull: Markov processes Type: general – SubjectFull: Distribution (Probability theory) Type: general – SubjectFull: Banking industry Type: general – SubjectFull: Federal Reserve banks Type: general – SubjectFull: Monetary policy Type: general – SubjectFull: United States Type: general – SubjectFull: Board of Governors of the Federal Reserve System (U.S.) Type: general Titles: – TitleFull: The diffusion of bank reserves in the U.S. Type: main BibRelationships: HasContributorRelationships: – PersonEntity: Name: NameFull: Ennis, Huberto M. – PersonEntity: Name: NameFull: Wolman, Alexander L. IsPartOfRelationships: – BibEntity: Dates: – D: 01 M: 09 Text: Sep2026 Type: published Y: 2026 Identifiers: – Type: issn-print Value: 24755648 Numbering: – Type: volume Value: 26 – Type: issue Value: 12 Titles: – TitleFull: Working Papers Series (Federal Reserve Bank of Richmond) Type: main |
| ResultId | 1 |