The Debts of the Spenders: Federal Reserve Continues To Pay Banks

And banks STILL refuse to lend. No surprise there as the only people w/credit have always been able to get credit while those w/poor credit. . . have poor credit for a reason.

WASHINGTON (MarketWatch) -- The Federal Reserve on Wednesday said it has raised the interest rate paid to banks on reserves that banks keep with it. The Fed said the latest formula for excess reserves sets the interest rate at the lowest FOMC target rate in effect during the reserve maintenance period. The previous formula set it at the target rate minus 35 basis points. The rate on required balances will be set at the average target fed funds rate over the reserve maintenance period. The previous formula set it at minus 10 basis points. The Fed said these changes would help foster trading in the funds market at rates closer to the FOMC's target federal funds rate. In recent weeks, trading has been below the Fed's target. The Fed said the new formula for paying interest on reserves -- an authority the Fed received as part of the Congressionally approved $700-billion bailout program for financial firms -- will be effective from Thursday, November 6.