지은이: Kevin D. Hoover (Cambridge University Press, 2011)
16.2. The Federal Reserve and the Banking System
16.2.1. The Cental Bank
Some History: (... ...)
The Structure of the Federal Reserve System
Federal Reserve Act divided the country into twelve districts, each with a Federal Reserve Bank. The locations of the banks are a legacy of the distribution of economic activity, population, and, perhaps more important, the balance of political power in Congress in 1913. Were the Federal Reserve to have been created early in the 21st century, it is unlikely that two Federal Reserve Banks would be located in Missouri(St. Louis and Kansas City).
Formally, each Federal Reserve Bank is a private corporation owned by the member banks in its district. Practically, the Federal Reserve Banks are government agencies. For example, except for a fixed dividend paid to the member banks, the profits of the Federal Reserve Banks are paid to the Federal government; and, although the district banks have some freedom in their day-to-day operations, all important matters of monetary policy and banking regulation are guided by the Board of Governors of the Federal Reserve System in Washington, DC. The Federal Reserve System(the Board plus the 12 district banks) is by its own description "an (... ...)
Figure 16.2. The Federal Funds Market. The supply of reserves depends largely on the past open-market operations of the Fed, and insensitive to the level of the Federal-funds rate. The demand for reserves depends on the opportunity cost to banks of holding them, which is a negative function of the Federal-funds rate: a bank that holds a dollar of reserves loses the interest it could have earned by lending it on the Federal Funds market, but gains not having to go to the market itself to borrow if it finds itself unexpectedly short of reserves. Equilibrium is, naturally, where supply equals demand, and it determines the Federal-funds rate.
Federa funds lending is literally overnight lending (...).
16.2.3. The Mechanics of Monetary Policy
To understand how monetary policy works, we must first understand the structure of the market for bank reserves(Federal funds). In 2008, the Fed began to pay interest on reserves at Federal Reserve banks.[주4] This is a major change in the operation of monetary policy. It will be easier, however, if we first consider how the Federal funds market operated for most of the period since WWII when the Fed paid no interest on reserves. We shall then consider the recent change.
The Classic Federal Funds Market
The Federal Funds(or Reserve) Market can be described in a simple supply-and-demand diagram. In Figure 16.2, The Fed' supply of reserves to the market is shown as a vertical line above R. The supply is determined mostly by the Fed's purchase of government bonds and does not change no matter how the Fed-funds rate(r_FF) may change[주5]
[주5] This is a simplification because banks may also borrow reserves from the FEd(discount loans). Such borrowing becomes more attractive than borrowing from other banks whenever the discount rate is lower than the Federal-funds rate. Recognizing this gives the reserve-supply curve a more complicated shape. But under the classic Fed rules, the Fed sets the discount rate above the Federal-funds rate, so there is very little discount borrowing; thus, we can usually ignore these complications.
Banks demand reserves to fulfill their legal reserve requirements and their prudential needs. Unhappily for the banks, under its "classic" operating procedures, the Fed paid no interest on reserves. Nevertheless, under the classic operating procedures a bank can profitably lend its excess reserves to other banks that need them. Each bank must consider the opportunity cost of hold an extra dollar of reserves.
On the one hand, if the bank holds the dollar, it loses what it could earn from lending itㅡthat is, the interest, measured by the Fed-funds rate(r_FF).
On the other hand, if the bank holds the dollar of reseres, that dollar remains available in case it is neede to honor an outstanding check or electronic funds(or wire) transfers. What is the value of that? If the bank did fall short, it would itself have to borrow the dollar and pay the the Federal-funds rate. As is generally true with economic decision, the bank must choose its course of action without knowing the outcome. It may decide to hold the dollar and yet, in the end, not need it. The the bank loses the interest with certainty. But there is some probabiity (call it 'prl' for 'probability of reserve loss') that the bank will be called on to use the dollar; then holding it avoids the need to borrow to meet its commitments. The value of this insurance is the probability of reserve loss times the cost of borrowing at the Federal-funds rate: prl×r_FF.
The opportunity cost of holding a dollar of reserves is then the certain loss of not lending it out less the probabilistic gain of avoiding having to borrow:
opportunity cost = r_FF－prl(r_FF) = (1－prl)r_FF
Notice that as the Fed-funds rate rises, the opportunity cost itself rises. When the opportunity cost is higher, a bank wishes to hold fewer reserve. As a result, the demand for reserves for the banking system should be downward sloping in Figure 16-2. Notice also, that as the probability of reserve loss increases, the lower the opportunity cost. So, at each Fed-funds rate, the banks would demand more reserves, and reserve-demand curve would shift to the right.
All of the reserve outstanding must be held by one bank or another. Any bank unwilling to hold them at a particular Fed-funds rate will try to lend (... 631p ...)