Ummmm, is this a bad thing?

 Federal Reserve Bank of St. Louis

Non-Borrowed Reserves of Depository Institutions

http://research.stlouisfed.org/fred2/series/BOGNONBR



Dave

(Not OT if it cuts into riding funds)

 
It looks that way, but I have to wonder about how valid it is.

 
Looks like a data glitch to me.  I don't think that depository
reserves can go below zero.

OTOH, what DOES stand out is that the reserve data appears to have no
correlation with recession whatsoever, so who gives a damn.

JayC

 
http://www.federalreserve.gov/releases/h3/Current/
dosn't do much to clarify things.

Perhaps its the reserve amount compared to the required quantity?


Looking up the 'term auction credit' term from the page above, leads
to this explanation:

http://seekingalpha.com/article/65426-the-fed-s-new-operating-tool-the-taf

http://wearethegovt.com/2007/12/13/will-the-fed-term-auction-credit-facility-unfreeze-the-credit-markets.aspx

Duh, should have just gone here
http://www.federalreserve.gov/monetarypolicy/taffaq.htm

"
In view of the pressures evident in short-term funding markets, the
Board of Governors of the Federal Reserve System (the "Board") has
approved the establishment of a temporary Term Auction Facility
("TAF") program in which the Federal Reserve will auction term funds
to depository institutions.

The TAF is a credit facility that allows a depository institution to
place a bid for an advance from its local Federal Reserve Bank at an
interest rate that is determined as the result of an auction. By
allowing the Federal Reserve to inject term funds through a broader
range of counterparties and against a broader range of collateral than
open market operations, this facility could help ensure that liquidity
provisions can be disseminated efficiently even when the unsecured
interbank markets are under stress.
"

So it looks like the TAF is a mechanism for fed reserve banks to loan
more than the required reserve would allow, without it showing up as a
drain on the required reserves.

Not too scary, I guess, unless the TAF credit doen't get paid back in
a timely fashion.


BTW, I guess this is the magic mechanism by which credit to banks was
greatly enhanced to deal with the credit crises.
That little tidbit is interesting and worth knowing. The credit crisis
was solved via more credit! I feel better already.


Dave

 
herehttp://www.federalreserve.gov/monetarypolicy/taffaq.htm

Here's a TAC chart:

http://research.stlouisfed.org/fred2/series/TERMAUC

Dave