excess reserves

"Most likely the Fed will look to the interest paid on excess reserves as the indicator of the stance of interest rate policy, " he said.

Furthermore, banks will, sooner or later, put their excess reserves to use in terms of lending or purchasing interest-yielding assets.

As Goldman Sachs notes, commercial banks voluntarily keep excess reserves at least 3 per cent above the RRR.

Until now it has not paid interest on those deposits, which means banks lend their excess reserves to other banks.

Professor Krugman is quite correct in his recent remarks regarding the buildup of excess reserves in US banks.

And on Monday, the Fed said it would begin to pay interest on banks' excess reserves and required reserve requirements.

Many analysts see these excess reserves as a pool of inflationary fuel just waiting for the match of credit demand.

As a result, all banks taken together now have "excess" reserves on which deposit expansion can take place.

The world economy can only rebalance if China stops accumulating excess reserves.

Fed officials have said options include paying interest on excess reserves and selling some assets on its balance sheet.

Excess reserves are only a problem if banks turn them into new loans that generate new spending.

Moving the monetary base from excess reserves to currency holdings, however, would yield no macroeconomic benefits.

So to keep the fed funds rate up, it has, since November 6th, been paying interest on excess reserves at the full target rate of 1%.

The increase in banks' liquidity would do nothing since banks already have massive excess reserves.

The Fed also could reduce the interest rate it pays banks on excess reserves parked at the central bank.

The result was the serious recession of 1937-38. Banks cut lending and sold assets to restore the cushion of excess reserves.

"Excess reserves" , US dollars and even gold are now seen as extremely useful, counter-cyclical tools for future crises.

For institutions that can hold reserves at the Fed, excess reserves are essentially equivalent to Treasury bills.

Instead of lending this money onto the real economy, banks have either hoarded it in excess reserves or invested it in government bonds.

Banks now have huge amounts of excess reserves, enabling them to make lots of net new loans.

This happened in 1937 after the Fed responded to rising inflation fears by removing excess reserves from the banking system.

Expansion takes place only if the banks that holdthese excess reserves (Stage 1 banks) increase their loans or investments.

The ratio of excess reserves of financial institutions averaged 8. 3 percent, indicating strong payment capacity.

This will be harder if the amount of excess reserves is doubled.

Federal Reserve data shows that U. S. banks are sitting on $1 trillion in excess reserves.

The central bank must pay the interest to the excess reserve and the current excess reserves' annual interest rate is 0. 99%.

'If a country gathers excess reserves, then this happens; if oil does X, then this happens, ' Mr. Jensen says.

Unused or excess reserves earn no interest.

U. S. banks have excess reserves of more than $1 trillion.

Why do these banks stop increasingtheir loansand deposits when they still have excess reserves?

At the same time the Central Bank was ordered to hand over $7 billion in "excess" reserves.

Banks currently receive 0. 25 percent in interest on their excess reserves.

Other measures, such as lowering the 0. 25% rate the Fed pays banks on their excess reserves, aren't likely to spur much activity.

In America, for instance, paying banks higher interest on excess reserves will sound to many like handing money to villains.

Since only $10 mustbe held against the new $100 in deposits, $90 is excess reserves and can giverise to $900 of additional deposits(7).

On Causes, Risks and Countermeasures on China's Foreign Exchange Excess Reserves

Leakage of Cash and Excess Reserves