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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (79794)	3/13/2001 5:43:06 PM
From: Ilaine	Read Replies (1) \| Respond to of 436258

What caught my eye was the explanation that banks have been gaming the system to avoid reserve requirements so that the reserve balance is around $5 or $6 billion. One implication is that the Fed is losing the ability to implement monetary policy. Another is that this is one more example of how leveraged the system is becoming. Reserve requirements are supposed to add stability, although I have been reading papers which claim that this is outmoded.