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US banks currently hold almost trillion in Fed deposits, as a result of the ongoing balance sheet expansion by the Federal Reserve. Meanwhile, a year-long exclusion of Fed deposits and US Treasuries from bank capital rules is set to expire on 31 March. This column proposes a simple, feasible, and mandate-consistent strategy to replace trillion in deposits with Treasury bills. These Treasuries could be held not only by banks, but also by mutual funds and non-residents, and this substitution also could save taxpayers money....Vox.euUnstuffing banks with Fed deposits: Why and howRobert McCauley, Corte Real Advisors; Boston University, University of Oxford
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US banks currently hold almost trillion in Fed deposits, as a result of the ongoing balance sheet expansion by the Federal Reserve. Meanwhile, a year-long exclusion of Fed deposits and US Treasuries from bank capital rules is set to expire on 31 March. This column proposes a simple, feasible, and mandate-consistent strategy to replace trillion in deposits with Treasury bills. These Treasuries could be held not only by banks, but also by mutual funds and non-residents, and this substitution also could save taxpayers money....Vox.euUnstuffing banks with Fed deposits: Why and howRobert McCauley, Corte Real Advisors; Boston University, University of Oxford
Topics:
Mike Norman considers the following as important:
This could be interesting, too:
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US banks currently hold almost $4 trillion in Fed deposits, as a result of the ongoing balance sheet expansion by the Federal Reserve. Meanwhile, a year-long exclusion of Fed deposits and US Treasuries from bank capital rules is set to expire on 31 March. This column proposes a simple, feasible, and mandate-consistent strategy to replace $3 trillion in deposits with Treasury bills. These Treasuries could be held not only by banks, but also by mutual funds and non-residents, and this substitution also could save taxpayers money....Vox.eu
Unstuffing banks with Fed deposits: Why and how
Robert McCauley, Corte Real Advisors; Boston University, University of Oxford