#5 stop paying interest on excess reserves. -also created in 2008, paying interest on reserves (iorb). this is when the fed prints money to lend to banks, then borrows the same money back from banks, rather than encouraging those tier 2 depository banks to lend it out to the public. -this enormous transfer of newly-created reserves to wall street has been at the us taxpayers expense and has increased the reserves held at the fed franchises by $3.1 trillion, up 70-fold since 2007. -the fed should sell off its balance sheet and immediately stop paying interest to these banks, which would encourage the banks to lend out their reserves to the public -congress should bring back the pre-2008 system of open market operations and stop the fed;s preferential credit allocation
United States