Fed’s policy framework may incentivise reserves hoarding

US Federal Reserve building

The Federal Reserve’s monetary policy framework could be inducing some commercial banks to hoard reserves, but this does not appear to be harming bank lending, a new study finds.

The research, by Fed economists Marcelo Rezende, Judit Temesvary and Rebecca Zarutskie, exploits the US central bank’s “technical adjustments” to its policy framework, whereby it adjusted the interest rate on excess reserves (IOER) relative to the target band. The authors use these adjustments to isolate how changes in

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here: http://subscriptions.centralbanking.com/subscribe

You are currently unable to copy this content. Please contact [email protected] to find out more.

To continue reading...

You need to sign in to use this feature. If you don’t have a Central Banking account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: