Liabilities include: 1. Cash in circulation before its introduction in 2008, cash in circulation accounted for about 90% of the Federal Reserve’s total liabilities, which is the main form.
After the Fed‘s introduction, however, reserves became the dominant form of the base, and the share of currency in circulation fell to 30% of the Fed’s monetary base.
2. Other deposits of depository institutions (deposit reserves) Deposit reserves include legal deposit reserves and excess deposit reserves.
After the Fed launched quantitative easing in 2008, reserve requirements grew to about 50% of the Fed’s total liabilities and became the dominant form of base money.
3. Reverse repurchase Agreement The Federal Reserve’s reverse repurchase operation aims to recycle excess liquidity by selling its own assets and locking other deposits of depository institutions into reverse repos, usually overnight.
