Recently in an interview, Prof Hebener suggested that the money and credit expanded by the Federal Reserve in their respectrive programs were entering the economy and not simply stored in US banking system as reserves.
Could someone please therefore explain what is meant by 'excess reserves' if these 'excess reserves' are not really kept as reserves at all but actually lent out? I was under the impression that 'excess reserves' meant money is being kept on bank balance sheets that is above the required reserve ratio.