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I'm sure this is an interesting article, but not only is my "article limit" reached, but I even can't login to read it.[0] Which is strange, given the hundreds

I'm sure this is an interesting article, but not only is my "article limit" reached, but I even can't login to read it.[0] Which is strange, given the hundreds of dollars per year I give The Economist to support them. If you want to stop people from stealing your articles, maybe give the paying readers access would be a start. [0] https://imgur.com/a/2uo4hnE https://imgur.com/a/2uo4hnE

topmonk 8y ago
I will set you free: http://archive.is/JYM3P http://archive.is/JYM3P
- seibelj 8y ago
  That's fine and all, but I am happy to pay for top-notch journalism. But even me, the paying customer, is locked out.
  - deleted 8y ago
    [deleted]
UncleEntity 8y ago
TLDR; Basically a bank which takes deposits from customers and then deposits the money at the Fed whereby earning a higher interest rate than the customer just depositing at a "regular" bank.
- AstralStorm 8y ago
  The problem is, the Fed would have to drop rates costing all the banks and reducing liquidity and removing the reason it exists for in the first place, which is being lender of last resort. It offers preferential rates to banks as they are cooperative agents. It is not running at free market rates. If it were to open to free market, Fed would have to adjust the rates until it matches the reserve... Unlike most agents on the market, Fed is free to deny you.
  - JumpCrisscross 8y ago
    > drop rates costing all the banks and reducing liquidity Lowering rates raises liquidity. It makes it easier to borrow and thus create money. > removing the reason it exists for in the first place, which is being lender of last resort The Federal Reserve has many functions, one of which is acting as a lender of last resort [2]. Acting as a central bank, i.e. managing the country's monetary policy, is its primary purpose. Addressing bank panics, facilitating transfers, and regulating financial institutions are secondary roles (albeit very important ones). In any case, reducing the interest paid on excess reserves does nothing to the Fed's standing. For most of the Fed's history, excess reserves were not paid special interest. It's a novel monetary policy instrument, and one still very much in its experimental phase. > It offers preferential rates to banks as they are cooperative agents The Fed pays 1.95% on reserves [2]. That is 5 bps less than what the Treasury pays to hold your money for one month [3]. It's 3 bps more than the average Fed funds rate, but within the 175-200 target range and less than the 2.1% 99th-percentile rate [4]. [1] https://www.federalreserve.gov/monetarypolicy/reqresbalances.htm https://www.federalreserve.gov/monetarypolicy/reqresbalances... [2] https://en.wikipedia.org/wiki/Federal_Reserve_System#Purpose https://en.wikipedia.org/wiki/Federal_Reserve_System#Purpose [3] https://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield https://www.treasury.gov/resource-center/data-chart-center/i... [4] https://apps.newyorkfed.org/markets/autorates/fed%20funds https://apps.newyorkfed.org/markets/autorates/fed%20funds
grzm 8y ago
This seems like a question for economist support. Have you reached out to them?

topmonk 8y ago

I will set you free: http://archive.is/JYM3P http://archive.is/JYM3P

seibelj 8y ago
That's fine and all, but I am happy to pay for top-notch journalism. But even me, the paying customer, is locked out.
- deleted 8y ago
  [deleted]

UncleEntity 8y ago

TLDR; Basically a bank which takes deposits from customers and then deposits the money at the Fed whereby earning a higher interest rate than the customer just depositing at a "regular" bank.

AstralStorm 8y ago
The problem is, the Fed would have to drop rates costing all the banks and reducing liquidity and removing the reason it exists for in the first place, which is being lender of last resort. It offers preferential rates to banks as they are cooperative agents. It is not running at free market rates. If it were to open to free market, Fed would have to adjust the rates until it matches the reserve... Unlike most agents on the market, Fed is free to deny you.
- JumpCrisscross 8y ago
  > drop rates costing all the banks and reducing liquidity Lowering rates raises liquidity. It makes it easier to borrow and thus create money. > removing the reason it exists for in the first place, which is being lender of last resort The Federal Reserve has many functions, one of which is acting as a lender of last resort [2]. Acting as a central bank, i.e. managing the country's monetary policy, is its primary purpose. Addressing bank panics, facilitating transfers, and regulating financial institutions are secondary roles (albeit very important ones). In any case, reducing the interest paid on excess reserves does nothing to the Fed's standing. For most of the Fed's history, excess reserves were not paid special interest. It's a novel monetary policy instrument, and one still very much in its experimental phase. > It offers preferential rates to banks as they are cooperative agents The Fed pays 1.95% on reserves [2]. That is 5 bps less than what the Treasury pays to hold your money for one month [3]. It's 3 bps more than the average Fed funds rate, but within the 175-200 target range and less than the 2.1% 99th-percentile rate [4]. [1] https://www.federalreserve.gov/monetarypolicy/reqresbalances.htm https://www.federalreserve.gov/monetarypolicy/reqresbalances... [2] https://en.wikipedia.org/wiki/Federal_Reserve_System#Purpose https://en.wikipedia.org/wiki/Federal_Reserve_System#Purpose [3] https://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield https://www.treasury.gov/resource-center/data-chart-center/i... [4] https://apps.newyorkfed.org/markets/autorates/fed%20funds https://apps.newyorkfed.org/markets/autorates/fed%20funds

grzm 8y ago

This seems like a question for economist support. Have you reached out to them?