A Tale of Demand and Supply for Central Bank Reserves

2026

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This paper analyzes the demand and supply of central bank reserves in an ample-reserves framework, revealing crucial insights into monetary policy implementation and financial stability.

* Examines the role of interbank market microstructure in understanding reserve demand and supply.
* Differentiates between bank and non-bank lenders to reveal heterogeneous supply elasticities.
* Provides evidence that distributional frictions, rather than aggregate scarcity, drive reserve tightness in ample-reserves regimes.

monetary policy, central bank reserves, interbank market, financial stability, ample-reserves

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