From Huffington Post:
The Fed is desperately trying to find ways to dial back on its $85
billion per month in bond purchases, an extreme stimulus program known
as "quantitative easing," while still supporting the economy. One
possible approach would be to stop paying banks a tiny interest rate for money they store at the Fed for safekeeping. The idea being that banks would be more inclined to put money to work with lending
and other stuff that helps the economy.
and other stuff that helps the economy.
But according to banks, that tiny Fed interest payment
is the only thing that helps banks break even on savings accounts and
other deposit services they provide. In order to protect their multi-billion-dollar bonuses and bank profits -- which have bounced to record highs
since that financial crisis the banks helped create, a crisis from
which the Fed and the American taxpayer bailed them out -- banks will
sadly have no choice but to punish their customers.
is the only thing that helps banks break even on savings accounts and
other deposit services they provide. In order to protect their multi-billion-dollar bonuses and bank profits -- which have bounced to record highs
since that financial crisis the banks helped create, a crisis from
which the Fed and the American taxpayer bailed them out -- banks will
sadly have no choice but to punish their customers.
That's not all: The banks say that, without that interest payment,
they might also be pushed to take ever-crazier risks with money that
was once safely parked at the Fed, the FT reports. Stop us before we
kill the economy again, the banks are saying. And by "stop us," they
mean, "give us all of your money..."
,
they might also be pushed to take ever-crazier risks with money that
was once safely parked at the Fed, the FT reports. Stop us before we
kill the economy again, the banks are saying. And by "stop us," they
mean, "give us all of your money..."
Some of the information from this article comes from the Financial Times (subscription only).
