Consider a $2 billion open market purchase of U.S.Treasury securities by the Federal Reserve.The Banking System's balance sheet will specifically show:

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When the Federal Reserve conducts an open market purchase of U.S. Treasury securities, it pays for the securities by increasing the reserves of the banking system. The $2 billion that the Federal Reserve spends on the securities becomes a liability of the Federal Reserve, but the $2 billion increase in reserves becomes an asset of the banking system. Therefore, the balance sheet of the banking system would show no net change in assets or liabilities, only a change in the composition of assets with securities decreasing and reserves increasing by $2 billion respectively.

Consider a $2 Billion Open Market Purchase of U