Millions of Americans put their savings into these markets, and employers use them to secure short-term funding to meet payroll and support their operations. Both of these facilities have equity provided by the Treasury Department to protect the Federal Reserve from losses.
Also, how can we explain cases in developing countries where a country’s central bank has fallen into excessive debt on a grand scale, and until its capital position was properly restored, its ability to conduct monetary policy was greatly damaged in practice, even though this phenomenon is not predicted in theory?