[MuffinFlavored]

> they store their cash with the fed (through a repo [repurchase] agreement) temporarily.

What does this gain them? Are they paid interest?

[eloff]

They pay for the privilege of having the Fed hold their cash.

[notahacker]

Contrary to the other two replies, yes, they are paid interest (it's a reverse of the standard repo where they borrow money from the Fed and pay the interest)

[selectodude]

Reading the comments on financial articles on HN makes me question the comments on the stuff I don't actually know something about.

[professoretc]

Banks don't like holding cash (because it doesn't belong to them, and could be withdrawn at any time). So it's actually the opposite: they pay for the privilege of not having to hold onto that cash.