In Janet Yellen’s testimony at her confirmation hearings, Senator Warner asked about the issue of banks having excess reserves on deposit with the Fed. He proposes lowering the interest that the Fed pays the banks on the $2.4 trillion of excess reserves. Yellen talks about his suggestion, and also provides a caution on the problems of implementing his suggestion.
Janet Yellen’s testimony could have been so educational if only more of the public could have heard it. Too bad the press doesn’t understand these issues well enough to realize the need to provide a forum for the public to learn about these topics.