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Discussion Paper
Monitoring Reserve Scarcity Through Nonbank Cash Lenders
In this note, we show that nonbank lenders' behavior as cash lenders can help discern early informative signals about the scarcity of reserves. Reserves, which are deposits that banks and other financial institutions hold at the Federal Reserve, are the most liquid asset on banks' balance sheets and hence play a central role in banks' liquidity management.
Discussion Paper
Firms’ financing choice between short-term and long-term debts: Are they substitutes?
When selecting debt to finance their operations and investments, companies face crucial decisions regarding the appropriate types of debt. Despite the classic Modigliani–Miller (1958) capital structure irrelevance result, real-world market frictions can significantly impact a firm's capital structure decisions. This reality means that one debt type is not a perfect substitute for another, due to differences in important factors including maturity structures, funding purposes, rollover risks, and funding costs.
Discussion Paper
Banks in the Age of Stablecoins: Lessons from Their Historical Responses to Financial Innovations
The expansion of stablecoins has moved digital payment tokens from the periphery of financial markets to the center of policy discussions. With a global market capitalization in the mid-hundreds of billions of dollars and annual settlement volumes in the trillions as of 2025, stablecoins are increasingly viewed not merely as crypto‐market infrastructure but as potential competitors to traditional transaction accounts, particularly in payment processing, settlement functionality, and as short-term stores of value for transaction balances.
Discussion Paper
Money Market Fund Repo and the ON RRP Facility
Between January 2021 and June 2022, money market funds' (MMFs') investments in the Federal Reserve's Overnight Reverse Repurchase (ON RRP) facility rose by $2 trillion, while their private repo lending fell by almost $500 billion. These sizable shifts give us an opportunity to examine how monetary policy implementation and the ON RRP facility interact with the private repo market.