The Feds Excess Confusion
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In our continuing search for the best insight and commentary from around the web, GlobeSt.com is pleased to work with industry veteran and innovator Ethan Penner. This is a synopsis of his recent blog post, "Bank Confusion," which can be read in its entirety here.
What exactly are “Excess Reserves”? In his most recent blog post, Ethan Penner explores this question and tries to piece together the facts behind the Fed’s potential decision on banks’ $2.5 trillion in excess reserves.
Also discussed in the post:
- The history of excess reserves after 2008.
- How the 0.25% interest rate paid by the Fed brings into question the reserves’ ownership.
- The relation between the $2.5 trillion figure and the combined equity in the banking system.
For an irreverent take on the macroeconomic environment, check out GlobeSt.com's Chief Economist authored by Dr. Sam Chandan.
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