globaleconomicanalysis.blogspot.com / By Mike “Mish” Shedlock / Tuesday, June 04, 2013 7:34 PM
The Fed believes that holding interest rates low fosters business growth, hiring, and bank lending?
So why isn’t that happening? I have discussed many reasons, but today I have another one from Steve H. Hanke, Professor of Applied Economics at The Johns Hopkins University who discusses The Federal Reserve vs. Small Business.
Hanke notes that one of the consequences of low interest rates is that “banks with excess reserves are reluctant to part with them for virtually no yield in the interbank market.”
And why should they? Why take risk for nothing?
Thanks to BrotherJohnF