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Foreign Banking Organizations in the United States and the Price of Dollar Liquidity

Author

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  • Wenxin Du

Abstract

Foreign banking organizations (FBOs) in the United States play an important role in setting the price of short-term dollar liquidity. In this post, based on remarks given at the 2022 Jackson Hole Economic Policy Symposium, we highlight FBOs’ activities in money markets and discuss how the availability of reserve balances affects these activities. Understanding the dynamics of FBOs’ business models and their balance sheet constraints helps us monitor the evolution of liquidity conditions during quantitative easing (QE) and tightening (QT) cycles.

Suggested Citation

  • Wenxin Du, 2023. "Foreign Banking Organizations in the United States and the Price of Dollar Liquidity," Liberty Street Economics 20230111, Federal Reserve Bank of New York.
    • Handle: RePEc:fip:fednls:95471
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    File URL: https://libertystreeteconomics.newyorkfed.org/2023/01/foreign-banking-organizations-in-the-united-states-and-the-price-of-dollar-liquidity/
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    More about this item

    Keywords

    foreign banking organizations (FBOs); dollar; reserves;
    All these keywords.

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

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