Wednesday, 14 January 2015

Is The Federal Reserve Requiring A Lot From The Banks?

Well, it's requiring a bit more than six years ago. But do note that it has increased from a historically low level.


If we widen the scale on the vertical axis, the dismal requirements look even more, well, dismal.


The answer? No, the Federal Reserve is not requiring a lot from banks. In fact, it's requiring next to nothing. A revisit of required reserve ratios is long overdue in the US as it is in most other countries if there are to be any hope of "financial stability" and real economic progress in the long term.

Related:

U.S. Banks Are Now Operating With 100% Reserves - Is Full-Reserve Banking The Next Step?