Re:Global real interest rates and the ‘suprasecular’ decline...
by pas on Saturday January 30, 2021 @06:21AM
(#25968209)
At least for the last few decades the limiting factor for money creation was interest rate, not the fractional reserve requirement.
Since there's a very active overnight market for lending excess reserves banks just borrow reserves if they need more to meet the requirements. This is the rate that central banks influence.
In the UK the fractional reserve requirement is 0% for example.
Since there's a very active overnight market for lending excess reserves banks just borrow reserves if they need more to meet the requirements. This is the rate that central banks influence.
In the UK the fractional reserve requirement is 0% for example.
Lending is entirely risk-weighted ROI limited.