Bernanke wants Fed to pay interest on reserves

Ben Bernanke, the chairman of the Federal Reserve, wants to pay interest on banks' reserves to stop interbank charges falling below the federal funds rate.

Bloomberg, a news service, reported on Wednesday that Bernanke was set to ask Congress to authorise interest payments this year in order to ensure that injecting extra funds impacts liquidity but not monetary policy. It cited sources "familiar with the matter" for the information.

Barney Frank, a member of the House of Representatives who