econintersect .com

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.

posted on 20 February 2016

The Cost Of Fed Membership

from the Richmond Fed

-- this post authored by Helen Fessenden and Gary Richardson

Outside the banking industry, many Americans were unaware that the Fed has paid dividends to member banks for more than a century. The issue garnered attention last year when Congress reduced the dividend for banks with $10 billion or more in assets from 6 percent to the 10-year Treasury rate - currently less than 2 percent.

Congress reduced the payments to help fund transportation needs, also taking money from the Fed's surplus account to fund the legislation. Senior Fed officials criticized both actions for setting a poor precedent on fiscal policy and intruding on Fed independence.

Since the Fed's founding in 1913, the dividend has been a key part of a bundle of costs and benefits that come with Fed membership. The dividend continues to be an important incentive for banks to join and stay in the System to reduce the risk of what is now known as "shadow banking."

[click on image below to continue reading]

Source: media/richmondfedorg/publications/ research/ economic_brief/ 2016/pdf/ eb_16-02.pdf

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical News Post Listing

Make a Comment

Econintersect wants your comments, data and opinion on the articles posted. You can also comment using Facebook directly using he comment block below.

Econintersect Contributors

Print this page or create a PDF file of this page
Print Friendly and PDF

The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.

Keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Middle East / Africa
USA Government

 navigate econintersect .com


Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day


Asia / Pacific
Middle East / Africa
USA Government

RSS Feeds / Social Media

Combined Econintersect Feed

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution



  Top Economics Site Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2018 Econintersect LLC - all rights reserved