The short answer was, it doesn't matter, the central banker is free to trade in the interbank pool and create its own corridor for its won account holders.
We can create a model for this by modifying the model in:
Overcoming Discount Window Stigma
An Experimental Investigation
Referenced in the comment section here.
That paper looked at residual trading when inter bank accounts using the Discount Window (DW) is considered a sign of weakness. Their model needs to be changed.
Instead ask, what is the probability that any deposit or loan will be marginally 'subsidized' or 'penalized' by the central banker of record? We are back toclosed money market fund: A class of S/L accounts and deposits 'closed' with loans out via a broker, market maker. If the trade is denominated in a fiat then the central bank of record can be considered to have intervened in that market for those denominated trades. Closure by using commutative property makes the hologram dimension measurable everywhere in the fiat domain. Making the tree trunk round.
Thus the correct model leads to quantized flow process, standard S&L banking theory. The risk equalization part is the collateral kept in the risk equalization account for Fed accounts, the entry/exit fee. This model is tractable, both in the math and in the sandbox algorithms.
So, write the white paper, paste and cut the research algorithms to the fed computer, hit CR.
Do central bankers know this?
I suspect so, the Fed research staff has brains and understand the concept is basic to corridor. They are trying to smooth the process within a restrictive regulatory environment. The implication to the past is simply that the Fed 'brokers' the market over a generational block of trades. The research staff at the fed is figuring this out. So with a bit of spectral conservation, they will see that forcing a 15 year estimate of imbalance will monetize the long term outlook much better, and that releases short term spectrum, discretionary spending due to efficiency gains. So the game plan for this account rebalancing is to incentivize Congress to give programs a 15 year outlook. The agencies will self sample at 6 years, for better cash flow accounting. We will make a velocity equation twice as accurate and accuracy equals productivity.
Do central bankers know this?
I suspect so, the Fed research staff has brains and understand the concept is basic to corridor. They are trying to smooth the process within a restrictive regulatory environment. The implication to the past is simply that the Fed 'brokers' the market over a generational block of trades. The research staff at the fed is figuring this out. So with a bit of spectral conservation, they will see that forcing a 15 year estimate of imbalance will monetize the long term outlook much better, and that releases short term spectrum, discretionary spending due to efficiency gains. So the game plan for this account rebalancing is to incentivize Congress to give programs a 15 year outlook. The agencies will self sample at 6 years, for better cash flow accounting. We will make a velocity equation twice as accurate and accuracy equals productivity.
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