Great piece! I don’t think that banks having plenty of reserves from all the QE is really a concern though, because in this environment, people are unlikely to take loans and banks will be hesitant to create new bank deposits.
Oddly enough though, reserve requirements ratio is at 0%. I guess bank reserves don’t matter much in monetary policy anym.
Agree, so long as the reserves stay reserves they won't have a big impact. Bank loans are reviving, but still at historical norms (about 11% yoy) and likely to ease if recession spreads.
As for the reserve requirement, agree it's surprising 0% has seemingly had little impact. I guess we'll see if that holds next boom 🤔
Great piece! I don’t think that banks having plenty of reserves from all the QE is really a concern though, because in this environment, people are unlikely to take loans and banks will be hesitant to create new bank deposits.
Oddly enough though, reserve requirements ratio is at 0%. I guess bank reserves don’t matter much in monetary policy anym.
Agree, so long as the reserves stay reserves they won't have a big impact. Bank loans are reviving, but still at historical norms (about 11% yoy) and likely to ease if recession spreads.
As for the reserve requirement, agree it's surprising 0% has seemingly had little impact. I guess we'll see if that holds next boom 🤔