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Injection (economics)
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When a central bank makes a short term loan to a member institution it is said to be injecting liquidity. In the United States, the Federal Reserve maintains a target federal funds rate for banks to loan money overnight to each other. If the lending banks are unwilling to offer enough credit at this rate, the central bank may step in and make loans itself through the discount window. In this role, the central bank is operating as the lender of last resort and is said to be injecting liquidity.
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Last updated on Monday August 20, 2007 at 07:16:06 PDT (GMT -0700)
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This article is licensed under the GNU Free Documentation License.
Last updated on Monday August 20, 2007 at 07:16:06 PDT (GMT -0700)
View this article at Wikipedia.org - Edit this article at Wikipedia.org - Donate to the Wikimedia Foundation
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