1 Introduction  4

2 Related Literature  7

3 The Economics of Self-Insurance  8

3.1 The Insurance Value of Reserve Accumulation  9

3.2 Structural Fragmentation of the Global Financial Safety Net  10

3.3 The Opportunity Cost of Reserves and the Safe-Asset Scarcity Externality  11

4 Balance Sheet Mechanics  13

4.1 Claim Structure and Valuation  14

4.2 Issuance and Redemption at Contemporaneous Market Value  15

4.3 Optional Standing Borrowing Window  16

4.4 Margining and the Role of the Public Layer  17

5 Quantitative Illustrations  18

5.1 Risk-Return Properties Relative to Traditional Reserves  19

5.2 Asset Pricing Interpretation  21

6 Liquidity Frictions and Tail Risk  22

6.1 Haircuts, Margin Calls, and Residual Exposure  23

6.2 An Illustration of the Collateral Facility in a Market Slump  24

7 Macroeconomic Aggregation and Market Impact  25

7.1 Demand Estimation and the Subscription Rule  26

7.2 Illustrative Aggregate Scale  27

7.3 Market Depth, Composition, and Price Pressure  28

8 Impact of the SRD on the Global Economy  30

8.1 Two Interacting Mechanisms  30

8.2 Pareto Improvements without Pigouvian Taxes  32

8.3 Conditions Suggested by the Framework  33

9 Conclusion  35