/biz/ - Business & Finance

>>16061080
Banks have to be willing to deal with each other for the repo market to function. Normally it's one bank buys another banks treasuries and buys them back the next day...but if the fed doesn't step in, banks will fail because they don't have enough cash to operate.

We saw back in September that the overnight repo rate went up to 10%, which is obviously outside of the fed funds rate. The fed didn't like that very much