Question

Typically banks rely on other banks to lend reserves to one another. Which interest rate do they charge for these loans

Answer 1

Answer:

Federal funds rate

Explanation:

federal funds rate is simply known as the interest rate at which depository financial institutions borrows(lends) funds maintained at the federal reserve to other depository financial institutions usually or Maybe overnight.

It is simply the interest rate that one bank charges another for borrowing money overnight. Its importance is to help banks meet their reserve requirements and prevent bank failure and also may be use to stimulate the economy.