Excess reserves present a juicy target for critics who claim the banking industry is depriving the economy of the fuel it needs to grow.

These funds, deposits at the Federal Reserve that exceed required minimums, exploded from less than $2 billion in August 2008 to an unprecedented, staggering $1.2 trillion last week — a total that is only headed higher. According to the Fed's latest data, required reserves were just $71.6 billion; add that to the excess reserves and the total is now nearing $1.3 trillion.

Register or login for access to this item and much more

All Bank Investment Consultant content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access