BIS paper finds reserves scarcity even during QE era

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Despite supposedly abundant reserves created by quantitative easing, US banks still rely heavily on incoming payments to replenish their accounts, research published by the Bank for International Settlements finds.

Researchers Gara Afonso, Darrell Duffie, Lorenzo Rigon and Hyun Song Shin note in the pre-QE era it was widely recognised there was “strategic complementarity” in the payments system. If all banks processed payments quickly, then their funds would be frequently topped up, allowing

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