The Federal Reserve, often referred to as the central bank of the United States, holds deposits from member banks. These deposits are then lent out to other member banks, forming a system of interbank borrowing. This process plays a crucial role in the overall functioning of the banking system, ensuring the availability of funds and maintaining financial stability. As a knowledgeable professor of finance, I urge you to delve deeper into the intricacies of this important aspect of our financial system.
