Dirk Niepelt

πάντα ῥεῖ

Skip to content
  • Dirk Niepelt
  • Research and Publications
  • Textbook, Lecture Notes, Code
  • Teaching
  • Blog
    • Research
    • Contributions
    • Teaching
    • Notes
Dirk Niepelt

Segregated Balance Accounts

In a Federal Reserve Bank of New York staff report, Rodney Garratt, Antoine Martin, James McAndrews and Ed Nosal argue in favor of “Segregated Balance Accounts” (SBAs):

SBAs are accounts that a bank or depository institution (DI) could establish at its Federal Reserve Bank using funds borrowed from a lender. … the funds deposited in an SBA would be fully segregated from the other assets of the bank … only the lender of the funds could initiate a transfer out of an SBA; consequently, the borrowing bank could not use the reserves that fund an SBA for any purpose other than paying back the lender. … the loan made by the lender to the bank would be collateralized by the reserve balances in the SBA account.

The authors argue that SBAs could foster competition in money markets and

help strengthen the floor on overnight interest rates that is created by the payment of interest on excess reserves.

The proposal is related to topics I discussed in previous blog posts:

  • Narrow banking proposals.
  • Reserves for Everyone—Towards a New Monetary Regime.
  • Reserves for Everyone—Towards a New Monetary Regime, Vox.
  • Notenbankgeld für Alle?, NZZ.
  • Sovereign Money in Iceland?
  • Reserves for All.

 

This entry was posted in Notes and tagged Bank, Bank run, Financial stability, Interbank market, Interest on reserves, Interest rate, Money, Reserves, Reserves for all, Segregated balance account on June 3, 2015 by Dirk Niepelt.

Post navigation

← Monetary Policy and Inequality Gotthard Base Tunnel →

Recent Posts

  • VOCES8: Agnus Dei by Samuel Barber
  • “Macro Finance: Assets, Government Debt, and Cryptos,” Bern, Spring 2025
  • “Fiscal and Monetary Policies,” Bern, Spring 2025
  • Does the US Administration Prohibit the Use of Reserves?
  • “Pricing Liquidity Support: A PLB for Switzerland” (with Cyril Monnet and Remo Taudien), UniBe DP, 2025
  • “Report by the Parliamentary Investigation Committee on the Conduct of the Authorities in the Context of the Emergency Takeover of Credit Suisse”
  • “Governments are bigger than ever. They are also more useless”
  • The New Keynesian Model and Reality
  • Urban Roadway in America: Land Value
  • “Macroeconomics II,” Bern, Fall 2024
  • “Makroökonomie I (Macroeconomics I),” Bern, Fall 2024
  • “Money and Banking with Reserves and CBDC,” JF, 2024
  • A Financial System Built on Bail-Outs?
  • Budgetary Effects of Ageing and Climate Policies in Switzerland
  • SNB Annual Report
  • Banks and Privacy, U.S. vs Canada
  • “Topics in Macroeconomics,” Bern, Spring 2024
  • “Fiscal and Monetary Policies,” Bern, Spring 2024
  • “Augenwischerei um SNB-Ausschüttungen (Misconceptions about SNB Distributions),” NZZ, 2024
  • Bank of England CBDC Academic Advisory Group

Archives

Meta

  • Log in
  • Entries feed
  • Comments feed
  • WordPress.org
Proudly powered by WordPress