SocraticGadfly: Fed boosts banks’ reserve interest rates

October 22, 2008

Fed boosts banks’ reserve interest rates

The Federal Reserve boosted the rate it will pay banks for excess reserves from 0.75 percent to 1.15 percent.

It encourages banks to have a better margin of reserves, it encourages them to put that with the Fed, and it gives the Fed the ability to control liquidity and money flows better.

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