macroblog.typepad.com - 10/8/2008
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That’s the question that perplexes Alex Tabarrok . But he has a theory (which is endorsed by William Polley ):
“Today the Fed starts to pay interest on reserves. The zero interest on required reserves was an opportunity cost to banks, a tax if you like, so paying interest lifts the tax…
...
federalreserve.gov - 10/7/2008
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federalreserve.gov —
Release Date: October 7, 2008 For release at
9:00 a.m. EDT The Federal Reserve Board on Tuesday...
announced the creation of the Commercial Paper Funding Facility (CPFF), a facility that will complement the Federal Reserve's existing credit facilities ...
(more)
FRB: Press Release--Board announces creation of the ...
econbrowser.com - 10/8/2008
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econbrowser.com —
I was astonished when I heard that the
Fed is contemplating increasing the Term Auction Facility to...
$900 billion. I wanted to take another look at the ever-changing balance sheet of the Fed to see how logistically Bernanke might be able to perform ...
(more)
Balance sheet of the Federal Reserve
federalreserve.gov - 10/6/2008
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federalreserve.gov —
Release Date: October 6, 2008 For release at
8:15 a.m. EDT The Federal Reserve Board on Monday...
announced that it will begin to pay interest on depository institutions' required and excess reserve balances. The payment of interest on excess reserve ...
(more)
FRB: Press Release--Board announces that it will begin ...
Comments
Blog Reactions
Balance sheet of the Federal Reserve
Econbrowser —
... are probably the biggest single item. A hundred billion here, and a hundred billion there, and pretty soon you're talking about real money. Macroblog has a nice visual of how these goodies all add up: ...
links for 2008-10-08
Economist's View —
Balance sheet of the Federal Reserve - Econbrowser
“Why is the Fed Paying Interest on Excess Reserves?” - macroblog
Capitalism and Skepticism - Christopher Carroll
If SS Was a Private Corporation it Would Sue Tom Brokaw - Dean Baker
It is time for comprehensive rescues of financial systems - Martin Wolf
Unfair to Brazil - Dani Rodrik
Carbon Prices and Driving - The Bellows
Boom goes the CDS - Free Exchange ...
Why pay interest on excess reserves?
Angry Bear —
rdan William Polley has a note on paying interest with links to Altig, DeLong, and others: David Altig takes up the question with links back to Marginal Revolution, DeLong, as well as my post from yesterday. (Thanks, David!) Rather than looking at it as what DeLong calls "Operation Twist", Altig opts for the simpler explanation that it will put a lower bound on the effective fed funds rate. That is, of course, the fundamental effect that this would have in any circumstance--crisis or not. It puts the Fed in as the ...
Wednesday links: adjust your strategy
Abnormal Returns —
... (All About Alpha)
Bill Miller officially a has-been. (BusinessWeek.com)
David Einhorn is done with Microsoft (MSFT). (Silicon Alley Insider)
Is $700 billion enough to put the banking system on the road to recovery? (Odd Numbers)
Why the Fed is paying interest on excess reserves. (macroblog)
Don’t hold your breath for the inevitable ...
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