In 1990, the Federal Reserve reduced reserve requirements on large, nonpersonal time deposits and net Eurocurrency liabilities. In this paper, evidence on who gained from the reduction in this tax is provided. No evidence is found to suggest that large depositors gained by way of higher yields....

Financial economists view reserve requirements as being important to financial markets. But, they have not always agreed on how reserve requirements impact financial markets. Conventional thinking would suggest that higher reserve requirements will result in lower rates paid on deposits, either...

In 1990, the Federal Reserve reduced reserve requirements on large, nonpersonal time deposits and net Eurocurrency liabilities. In this article we provide evidence on who gained from the reduction in this tax. No evidence is found to suggest that large depositors gained by way of higher yields....

The discussion in many money and banking textbooks would suggest that the Federal Reserve requires depository institutions to hold a minimum level of non-interest-earning reserves because (1) reserve requirements are a monetary policy tool that allows the Fed to expand the money supply and lower...