Why did the Federal Reserve flood the banks with twice the current amount of money in Sept 08?
it appears that way for two reasons 1) They changed the way they do accounting. From their web site: “Factors Affecting Reserve Balances of Depository Institutions and Condition Statement of Federal Reserve Banks,” has been modified to include information related to Federal Reserve System purchases of mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac, and Ginnie Mae.” So it is not quite apples and apples 2) The fed has pumped significantly more money into the economy to counter the drop from failed mortgages.
