10. This One Simple Fed Trick Earns the Bankers Billions

Tags: The Fed

12/26/2018 Robert P. Murphy

Bob explains what he means when he tells crowds, “Back in the fall of 2008, as the financial crisis hit, the Fed began paying backs to not make loans to their customers.” Specifically, Bob explains the new Fed procedure of “paying interest on reserve balances.” As of the Fed’s December 2018 meeting, the Fed now pays the banks $40.8 billion on an annual basis—to not make loans to their customers.

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