Asked by keith sanders on May 16, 2024
Verified
What is the Term Auction Facility?
Term Auction Facility
A monetary policy tool used by the Federal Reserve to provide short-term loans to banks, aiming to improve liquidity and stability in financial markets.
- Elucidate the responsibilities, structure, and functional dynamics of the Federal Reserve Open Market Committee (FOMC).
Verified Answer
KM
Krystine MeltonMay 18, 2024
Final Answer :
The Term Auction Facility is the market created by the Fed where eligible banks bid on the rates they are willing to pay to borrow funds. In this way, the rate to borrow is determined competitively by banks rather than set explicitly by the Fed.
Learning Objectives
- Elucidate the responsibilities, structure, and functional dynamics of the Federal Reserve Open Market Committee (FOMC).