The financial asset most widely held by U.S. households – bank deposits – is earning a miserly interest rate, far below competitive market rates…
CONTINUE READINGCompetition in banking deposit markets is weak but can be strengthened. Because of the weak competition in deposit markets, the Federal Reserve, surprisingly, began competing against banks for the funds…
CONTINUE READING“If you live in Connecticut, there’s a new bank in town whose only business goal is to pay its depositors a rate very close to the Federal Reserve’s IOER (interest on excess…
CONTINUE READING“The Federal Reserve has recently used a once-obscure policy lever to thwart two efforts at financial innovation. In one case, a new credit union hoped to serve marijuana-related businesses; in the second,…
CONTINUE READING“The global financial crisis reminded banks that,while bad credit can be a cancer- like slow killer, a liquidity crunch can be a sudden executioner. The result was new regulations that…
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