After eight years of unprecedented intervention in financial markets, the Federal Reserve has taken the first baby steps in a long-term mission to extract itself. But it's good to have a backup plan just in case that doesn't work out.

That's one way to look at the new "overnight bank funding rate" the New York Fed unveiled Wednesday. The rate is intended to shore up the calculation that comprises the federal funds rate, a once-robust gauge of interbank borrowing costs that serves as the U.S. central bank's monetary policy target, but has lost its significance as a barometer of underlying economic activity since the 2008 financial crisis.

The Fed's cash injections into the financial system—through bond purchases that have added around US$2.4 trillion to bank balance sheets—and a spate of new regulations have combined to reduce interbank lending by 88 percent from its peak of $482 billion in September 2008, right before the crisis struck. As a result, less than 10 percent of transactions in what is left of the fed funds market are banks borrowing from one another to meet reserve requirements, according to the New York Fed.