My understanding is that the problem is not that banks don't have money, but that they don't have the right kind of money.
They need fed reserves, which is the only kind of money that works intra-day for bank needs, but they have treasuries and other stuff, which only clears the next day.
Why don't they sell treasuries today so that they have the money tomorrow and thus no problem tomorrow I don't understand.
They need fed reserves, which is the only kind of money that works intra-day for bank needs, but they have treasuries and other stuff, which only clears the next day.
Why don't they sell treasuries today so that they have the money tomorrow and thus no problem tomorrow I don't understand.