June Fed moments — banking institutions may use T-Bills as security for extra reserves
The mins through the June 18-19 Fed meeting show that the Fed is considering permitting banking institutions to utilize security, such as for instance T-Bills for extra reserves. They truly are considering creating a repo center that really leads to banking institutions simply publishing T-Bills alternatively of money for extra reserves. The moments expose range advantages and disadvantages utilizing the approach. It might be a good idea to have banks only post T-Bills for extra reserves above $20 billion.