Within two days following the September 11, 2001 terrorists attacks, the float in the banking system increased by almost a hundred fold.Float is an asset of the Fed since it represents loans being made to banks by the Fed, yet this dramatic increase in float caused the Fed to actually have to increase reserves to keep the payments system from coming to a halt.Explain why this was the case.

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The Answer of Within two days following the September 11, 2001 terrorists attacks, the float in the banking system increased by almost a hundred fold.Float is an asset of the Fed since it represents loans being made to banks by the Fed, yet this dramatic increase in float caused the Fed to actually have to increase reserves to keep the payments system from coming to a halt.Explain why this was the case.

Within Two Days Following the September 11, 2001 Terrorists Attacks