Briefing
The effect of interest on reserves on monetary policy
Abstract: In October 2008 the Federal Reserve began paying banks interest on the reserves they hold. This action was intended to remove the implicit, distortionary tax that reserve requirements impose on banks, as well as help the Fed maintain the fed funds rate at its target. Going forward, interest on reserves is likely to simplify monetary policy implementation, as well as allow the Fed to pursue separate monetary and credit policies.
Keywords: Inflation (Finance); Monetary policy;
Access Documents
File(s):
File format is text/html
https://fraser.stlouisfed.org/files/docs/historical/frbrich/econbrief/frbrich_eb_09-12.pdf?utm_source=direct_download
Description: Full Text
Authors
Bibliographic Information
Provider: Federal Reserve Bank of Richmond
Part of Series: Richmond Fed Economic Brief
Publication Date: 2009
Issue: Dec
Order Number: 09-12