Banks do not base decisions on how much they should hold in reserve at the Federal Reserve Banks on their desire to earn the interest paid on excess reserves, according to a Fed survey of senior financial officers released today.
The benefits that TNB offers its institutional investor client base would be more than offset by the harm it does to the banking system and the Fed’s use of IOER.
ABA today expressed its support for the Federal Reserve’s proposed approach toward so-called narrow banks.
The Federal Reserve today sought public comment on whether it should reduce the rate of interest paid on excess reserves for banks with a so-called “narrow” model that involves holding a large proportion of its assets on reserve at the Fed.
The Federal Reserve System paid $65.4 billion out of its annual net income to the U.S. Treasury in 2018, according to figures released today.
Banks are not basing decisions on how much to hold in reserve at the Federal Reserve Banks on a desire to earn the interest paid on excess reserves, according to a Fed survey of senior financial officers released today.
Banks need to make clear that IOER payments are not a subsidy for them.