Latest / Monetary Policy Explained with Fexingo: Central Banks, Money Supply, and Interest Rates
How Central Banks Use Standing Facilities to Control Short-Term Rates
Episode 31 of Monetary Policy Explained with Fexingo drills into standing facilities—the lending and deposit windows that keep short-term interest rates within a central bank's target corridor. Lucas walks through how the ECB's marginal lending facility and deposit facility act as a ceiling and floor for overnight rates, using real examples from June 2026 when the ECB narrowed its corridor. Luna pushes back on whether standing facilities still matter in a world awash with reserves, and Lucas explains why the Fed's interest on reserve balances (IORB) has effectively replaced the…
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