Reserves growth does not boost lending: Fed study

federal reserve

The enormous growth in reserves supplied to the economy by the Federal Reserve does not have any impact on bank lending, a Federal Reserve paper has argued.

The paper, published on Wednesday, dismissed claims the growth in banks' reserves are having any material impact on loan provisions, and found evidence that rejected the link between the money multiplier and bank lending assumed in some economic literature.

With total reserve balances at the Federal Reserve growing from $18 billion on 14 Aug

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