The liabilities of the Fed [0] are money in circulation, reserves accounts of banks (mainly to meet requirements) and the deposits of the Treasury. Besides the fact that it is not clear why the Fed may collapse when they can create money to pay back their liabilities, I am not sure what it would mean for the Fed to default on the bills and coins in circulation (?) or to wipe out the accounts of banks when those very banks are legally bound to hold money in those accounts.[0] https://www.federalreserve.gov/monetarypolicy/bst_recenttren...
Fjolsvith|5 years ago
[deleted]
touktouk|5 years ago
- A large chunk of the Fed liabilities are coins and bills. What does it mean for the Fed to "default" on those coins and bills?