Why the Fed paying interest on reserves matters

ABA Banking Journal Podcast

Content provided by American Bankers Association. All podcast content including episodes, graphics, and podcast descriptions are uploaded and provided directly by American Bankers Association or their podcast platform partner. If you believe someone is using your copyrighted work without your permission, you can follow the process outlined here https://ppacc.player.fm/legal.

13d ago 10:51

MP3•Episode home

The payment by the Federal Reserve of interest on bank reserves may sound like an abstruse matter of economic theory, but these payments are critical to bank operations and the Fed’s conduct of monetary policy. In the latest episode — sponsored by Intrafi’s Banking with Interest — ABA’s Jeff Huther discusses why proposals to end or reduce interest on reserves are misguided. Among other things, Huther discusses:

Why ending payments could have a destabilizing effect on the financial sector.
Why, under today’s accounting practices, the federal government would see no near-term bottom-line boost from capturing those payments.
How reducing or eliminating interest on reserves would disproportionately harm community banks.

Read more in Huther’s ABA DataBank post.

150 episodes

#Tech #Leadership #MBA #American Bankers Association #Finance #Business #Business Disciplines #Banking