Julie Hill on the History and Recent Developments of Fed Master Accounts
Macro Musings with David Beckworth
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T&B's Response to the Fed
The narrow bank is trying to arbitrage the spread between the underserved and their funding costs. The Fed was worried about that, how they didn't want that to impair their ability to conduct monetary policy as well as cause a run on the banking system during panics. One of the things T&B is so they're willing to do is after a short startup period, they'll commit to not growing their deposits at the Fed too quickly.
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