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Because holding cash costs money, you need to have a big place to stash it and keep it secure. Some banks are trying to do that though, but it is not easy to do
by mars4rp 7y ago
Because holding cash costs money, you need to have a big place to stash it and keep it secure. Some banks are trying to do that though, but it is not easy to do in scale of billions.
- UncleEntity 7y agoBanks hold their excess reserves at the Federal Reserve[0] and receive interest on top, currently 2.35%. Scales up to at least a couple trillion give or take a few hundred billion. [0] https://fred.stlouisfed.org/series/WRESBAL https://fred.stlouisfed.org/series/WRESBAL
- toast0 7y agoEuropean banks hold their excess reserves (or at least their required minimum reserves) at the European Central Bank or their country's central bank; all of which are currently charging interest for the privilege.