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Monday, 2 February 2015

Open market operations are the primary tool used to regulate the supply of bank Reserves.

http://en.wikipedia.org/wiki/Federal_Reserve_System#cite_note-91

Open market operations are the primary tool used to regulate the supply of bank reserves. This tool consists of Federal Reserve purchases and sales of financial instruments, usually securities issued by the U.S. Treasury, Federal agencies and government-sponsored enterprises. Open market operations are carried out by the Domestic Trading Desk of the Federal Reserve Bank of New York under direction from the FOMC. The transactions are undertaken with primary dealers.

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