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What happen when bank borrow money from federal reserve bank and not pay it back ? Does inflation happen? Or nothing happen ?

If a bank borrows from the federal reserve and does not pay it back, then the bank will most likely have to go to court.  They will either be sued by the federal reserve bank and forced to repay it by the government, or, if they can't pay it back, they will have to file bankruptcy and default on their debt.  Either way, it would end up in court for the judges to decide.


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Michael Taillard


Accepts most economic questions


Consulting with major corporations, government agencies, political organizations, small businesses, non-profits, start-ups, and even individual people. Teaching at universities around the world, and developing original coursework. Performing original research and analysis. Writing books and scientific studies.

American Economics Association

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PhD (Financial Economics; honors) -- MBA (International Business Finance; honors) -- Grad School Certificate (International Business Management; honors) -- BS (International Business Economics; honors) -- AA (Business Administration; honors) -- Certificate (Chinese Language and Culture) -- Trade School (Transportation Logistics; honors)

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