Legal

Excess Reserves And The New Challenges For Monetary Policy

Download Now Free registration required

Executive Summary

In recent months, the level of total reserves held by Depository Institutions (DIs) in the United States has been consistently above $1 trillion. Of this, required reserves have been less than 7 percent. In the five years prior to September 2008, total reserves fluctuated between $38 billion and $56 billion, and required reserves fluctuated between 80 percent and 99 percent of total reserves. Hence, the recent level of reserves represents a dramatic change from previous experience. There has been much debate about the implications of high levels of reserves for the economy and how monetary policy is conducted.

  • Format: PDF
  • Size: 63.3 KB