Major central banks remunerate reserves at negative interest rates and it is increasingly likely that they will keep … equilibrium model with commercial banks funding investment projects and a central bank issuing reserves. Negative rates distort …. Exempting a fraction of reserves from negative rates can resolve profitability concerns without affecting the central bank …

facilitating greater pass-through of interest on excess reserves (IOER). SBAs are designed to remove credit risk by creating narrow … more tightly linked to that rate. SBAs could promote a more efficient allocation of reserves within the banking sector by … shifting reserves from banks with high balance sheet costs to banks with low balance sheet costs. SBAs would not require …