Europeans drain billions from banks, fed up with shrinking savings

Re:Europeans drain billions from banks, fed up with shrinkin... by prottog on Thursday May 04, 2023 @02:07PM (#35819673)

It's not. A narrow bank is one that effectively passes on the federal funds rate as interest to a demand checking account. T-bills are a completely different animal.

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Re:Europeans drain billions from banks, fed up with shrinkin... by SilasX on Thursday May 04, 2023 @05:53PM (#35822610)

Merely substituting one low-risk instrument for another doesn't seem like a meaningful difference in this context.

Coincidentally, just two days ago I commented on the distinction to someone suggesting this kind of service: https://news.ycombinator.com/item?id=35790913

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Re:Europeans drain billions from banks, fed up with shrinkin... by prottog on Thursday May 04, 2023 @08:52PM (#35824063)

There's one critical difference, which is that only chartered banks within the Federal Reserve system can take advantage of the federal funds rate, whereas anyone (including individuals) can buy T-bills.

The Fed, for various reasons, implicitly disallow this type of narrow bank. Several people have tried but the Fed always denied their application to join the system.

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Re:Europeans drain billions from banks, fed up with shrinkin... by SilasX on Thursday May 04, 2023 @09:39PM (#35824329)

Aren’t they basically the same rate?

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