In the corridor system, the interest rate paid on reserves is the minimum rate on overnight loans.

Name: In the corridor system, the interest rate paid on reserves is the minimum rate on overnight loans.
Brand: Quizplus
Rating: 4.7 (30 reviews)

Question

Quizplus · Accepted Answer

In the corridor system, the interest rate paid on reserves typically sets the floor for the overnight interest rate, as banks would not lend to each other at a rate lower than what they can earn on reserves.

In the Corridor System, the Interest Rate Paid on Reserves