Ellen Brown OpEd: Why is the Fed paying so much interest to banks?

Federal Reserve

Federal Reserve. Photo courtesy Truthdig / creative commons.

 

While we receive virtually nothing on our deposit accounts in interest payments, which currently average a mere one-tenth of 1% per year, banks themselves are earning 2.4% on their deposits at the Federal Reserve. Why are the banks getting all this money while taking absolutely no risk?

As PBI Chair Ellen Brown explains in her latest article in Truthdig:

“That means we, the taxpayers, are paying $36 billion annually to private banks for the privilege of parking their excess reserves at one of the most secure banks in the world—parking them, rather than lending them out.”

Why not create a safe Fed deposit window for everyone, accessible at your local post office? Ellen continues:

“Some interesting proposals are on the table for opening the Fed’s deposit window to everyone, allowing us all to collect 2.4% on our deposits.

“One such plan was presented in a June 2018 policy paper, titled ‘Central Banking for All: A Public Option for Bank Accounts,’ by a trio of law professors and former Treasury advisers headed by Morgan Ricks. They suggested that for the physical infrastructure to handle so many accounts, the Fed could use the post offices peppered across the country.”

[Read the full article]

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