Loan money to the bank?
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Banks loan money to other banks to meet the Federal Reserves 10% amount using the Federal Funds Rate as a guide. Is it possible for another entity, other than a bank, to loan the money to a bank? I'm not refering to CD's or savings account either.
Loan money to the bank?Yes-
If the bank has a Grand Cayman Branch it can accept Eurodollar Deposits (Cash balances in US currency).
Most Mutual Funds, Insurance Companies, and Big Corporations will invest (loan) their excess cash (Eurodollar Deposits) overnight to banks--provided the bank has a Cayman Branch.
DeBossy needs to spend some time on a Fed Funds trading desk at a reasonably sized bank before he attempts to answer. It embarassing for him.
Loan money to the bank?hummm good question....(that means i dont know) lol
Loan money to the bank?banks don't do the bank loans, the federal reserve does. it is a seperate entity of the government and makes sure banks have sufficient cash on hand, or in a depository institution, to get a bank cash quickly and efficiently so as to be able to satisfy the needs of the bank customers. it is also the source for fast cash in the event a bank's cash reserve on hand does not fall below a set amount and thus be forced to close its doors due to not having sufficient cash in the event there is a run on a particular bank, or bank branch.
the federal funds rate is what a bank is charged per day when the bank has a cash on hand problem, regardless of cause, and is just a guarantee of availability of cash the next morning of banking business prior to a bank making the necessary cash adjustments during the day's business.
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