Bernanke letter confirms interest payment plans

Ben Bernanke, the chairman of the Federal Reserve, has called on Congress to allow the institution to pay interest on banks' reserves - a move reported earlier this month. The change will stop interbank charges falling below the federal funds rate.

In a letter to Nancy Pelosi, the speaker of the House of Representatives, Bernanke said that the payment of an interest rate on reserves commensurate with its federal funds target would "enhance the effective implementation of monetary policy by

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