Interest on Reserve Balances
a.k.a. IORB, IOER
The interest rate the Federal Reserve pays banks on money they keep in their reserve accounts at the Fed.
In plain English
The interest rate the Federal Reserve pays banks on money they keep in their reserve accounts at the Fed.
Since 2008 the Fed has paid interest on bank reserves. The current version is called IORB. Because banks will not lend to others for much less than the Fed pays them risk-free, IORB helps hold the federal funds rate in its target range.
It is one of the main tools of the Fed's ample reserves regime.
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