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In November 2008, the Fed began to pay interest on reserves held at the bank

Economics

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In November 2008, the Fed began to pay interest on reserves held at the bank.

• What effect would you expect on excess reserves?
• Did banks generally favor or oppose this action?
• Would central banks generally favor or oppose this action?
• What effect did this probably have on interest rates paid by banks?

Each discussion topic will be "Open" for a one-week period. There are two aspects to discussions: an original post and a response to peers.

• You are required to post one "substantive" posting addressing the course material. By "substantive," I mean not merely providing a brief "yes, I agree" or "no, I do not agree" posting, but discussing the issues in some depth, providing your own thoughts or questions on the matter. Ideally, I'd like you to connect and integrate the discussion prompt to the course lectures, class discussions, and course textbook (whenever possible). The more evidence that shows you are doing the readings and engaging with them, the better. In your posting, avoid making unsubstantiated assertions and claims. Support your point with evidence from the textbook or other websites (include citations), whenever possible. Some possible ideas to write about include, describing any connections between the readings or course material, expanding on a concept or idea that struck you in the course material, or offering another explanation or illustrative example. (minimum of 250 words)