Hint: It’s Not to Make Loans – Published on truthDig (first on Web of Debt), by Ellen Brown, Oct 26, 2014.
… Reckoning with the Fed:
Ever since the Federal Reserve Act was passed in 1913, banks have been required to clear their outgoing checks through the Fed or another clearinghouse. Banks keep reserves in reserve accounts at the Fed for this purpose, and they usually hold the minimum required reserve. When the loan of Bank A becomes a check that goes into Bank B, the Federal Reserve debits Bank A’s reserve account and credits Bank B’s. If Bank A’s account goes in the red at the end of the day, the Fed automatically treats this as an overdraft and lends the bank the money. Bank A then must clear the overdraft. Continuer la lecture de « Why Do Banks Want Our Deposits? »