Newbie Federal reserve observations

Hello - I am not an expert on inter banking. I hope to learn something from my fellow steemians.

I am intrigued by the jump in excess reserves deposited at the Federal reserve.

I know that the FED started to pay interest to member banks for their excess reserves.

https://en.wikipedia.org/wiki/Emergency_Economic_Stabilization_Act_of_2008#Interest_on_bank_deposits_held_by_the_Federal_Reserve

Before 2008/9 excess reserves deposited at the FED ran the risk of dragging down bank earnings. I think the growth in reserves deposited at the FED demonstrates a preference for member banks to simply deposit at the FED and not fund loans - or at least fund only those loans that beat the FED risk/reward. (This subsidy will imply a host of odd behaviors worst of which might be funding riskier loans than rate offered by FED - maybe not so unintended? - see below )

Meanwhile, the Fed's balance sheet has been growing

Suppose you are a member bank. You know the FED will pay you to use your excess reserves to purchase credit(s) (The claim is that these FED purchases are all government and/or collectivized high grade). You may feel certain that your bank depositors capital is 'safe' and backed by the Fed balance sheet purchases. In an odd way, you are no longer 'fractional reserving' but have instead lent money to a large diversified(?) bond portfolio managed by the FED. In another oddity, member banks that had Joe's mortgage as an asset and sold it to the FED (who then packaged it within some giant MBO), are underwriters of the FEDs machinations. The member bank can claim it has sold a lower credit, to buy an improved diversified credit.

The excess reserve liability stays with the member bank. Sure, general diversification can reduce risks, but if I am only purchasing mortgages or credits, I have a limit to risk reduction using diversity. Everything in my basket is still positively correlated.

Ben Bernanke's bargain was to trigger a massive repurchase program, financed (mostly?) by member banks in hopes that if the FED bought long enough, the credit machine would find equilibrium. The Paulsen bazooka - who knows, maybe it is finally working?? As credit gets hoovered up by FED, the excess rate should look less attractive because you are financing a sort of mutual fund that is now most probably at a premium to net asset value ( as the FED runs out of securities to buy http://www.kiplinger.com/article/investing/T052-C003-S002-the-great-bond-shortage.html)
Compound the problem that people know they would be lending at historic tights - as in the FED has distorted those credit markets it was trying to stimulate and do you want to lend to credits that should pay 500bps paid, only ask 250 because the benchmark high yield trades at the tights? ... what, me worry? Better to stay with paid reserves at the FED and hit the exit whenever it looks normal again.

How fast can excess reserves be called back from the FED and under what circumstance. I suspect there is an 'early with drawl' penalty because how can the FED continue to finance such a large balance sheet when faced with fewer reserves? The FED could sell securities to pay redemptions, but too many sales and the market will react. Can the FED simply issue new reserve notes to any member bank making with drawls - and so increase the stock of money?

It seems the M2 supply has been increasing - at least vs a relatively static CPI price. Things get more interesting when we look at different M gauges. https://en.wikipedia.org/wiki/Money_supply#United_States

My question is do people agree with my Bernanke's grand repo idea and if so, how does it get unwound?