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The article examines the potential of financial market changes to represent a fundamental shift in the way the Federal Reserve offered liquidity through the primary credit facility in the U.S. It notes the capability of the facility to yield credit to financially sound banks at a rate 100 basis points above the target federal funds rate of the Federal Open Market Committee. It depicts the effectiveness of the implicit costs of borrowing in the stabilization of the money market.

Talks about the impact of the U.S. Federal Reserve's 1994 policy change, by which it announced the target level for the federal funds rate, on the liquidity effect and the manner in which the central bank uses open market operations to control the federal funds market as of May 2002. Model of the reserves market; Deviations of the federal funds rate from the target; Investigation of the manner in which the Trading Desk juggles different types of open market operations.