Wat. Is there some more complicated picture, there, where they don’t have to maintain real reserves but they do need to hold something like overnight loans from the Fed as reserves? Because if they’re really untethered from reserves of any kind, they can ‘print’ as much money as they want, which seems...
It’s not necessarily a terrible idea, but it does entail that the central bank give up its monopoly, and that seems like an insane move from the central bank’s perspective.
Wat. Is there some more complicated picture, there, where they don’t have to maintain real reserves but they do need to hold something like overnight loans from the Fed as reserves? Because if they’re really untethered from reserves of any kind, they can ‘print’ as much money as they want, which seems...
It’s not necessarily a terrible idea, but it does entail that the central bank give up its monopoly, and that seems like an insane move from the central bank’s perspective.
There are complex rules which serve similar functions to reserve requirements. See here for a start.
I don’t know the full picture on that, it confuses me too.