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The Fed versus the Narrow Bank
- akrymski 4y agoGood overview on Fed's response to TNB: https://johnhcochrane.blogspot.com/2019/03/fed-vs-narrow-banks.html https://johnhcochrane.blogspot.com/2019/03/fed-vs-narrow-ban...
- akrymski 4y agohttps://archive.ph/WEuO8 https://archive.ph/WEuO8
- JumpinJack_Cash 4y agoIf the Fed won't do it then other Central Banks considered safe such as the Swiss Central Bank or Japan should absolutely allow for this. They are essentially substitute for banknotes, people have the right to have established a separation between transactional services and investing. People right now are de-facto investing in the loan portfolio of their commercial banks
- akrymski 4y agoI was hoping a Central Bank Digital Currency would be this. But it seems to be bank-to-bank only: https://www.atlanticcouncil.org/blogs/new-atlanticist/its-official-the-united-states-is-developing-a-bank-to-bank-digital-currency/ https://www.atlanticcouncil.org/blogs/new-atlanticist/its-of...
- r721 4y ago(2019)
- akrymski 4y agoIf banks are mostly investing in things that are riskier (and so higher-return) than Fed deposits, they should be able to pay interest that is higher than the rate on Fed deposits. But in reality you get the reverse, as what the Fed is doing is basically paying bankers. If people could park money at the Fed the way they put cash in a vault, they'd probably pay a fee for the privilege!
- JumpinJack_Cash 4y ago> > If banks are mostly investing in things that are riskier (and so higher-return) than Fed deposits, they should be able to pay interest that is higher than the rate on Fed deposits. Comical. That spread is for shareholders not for peasants. (As he adjusts the monocole)