End interest on excess reserves; return to pre-2008 open-market-operations regime
Mandate says the Fed should immediately stop paying interest on excess reserves (framed as printing money then borrowing it back from banks) and Congress should restore the pre-2008 open-market-operations system.
Mandate
Mandate Ch. 24 (Federal Reserve) — Broad Recommendations: stop paying interest on excess reserves immediately; either sell off balance sheet or stop paying interest so banks lend; Congress should bring back the pre-2008 system founded on open-market operations.
Undo plan
1) Any IOER change must be sequenced with ample-reserves vs scarce-reserves operating framework redesign.
2) Avoid abrupt policy that spikes money-market volatility.
3) Use congressional hearings on floor-system alternatives before hard stop.
4) Codify transparency on reserve remuneration policy.
5) Verify: federal funds rate control errors and bank lending responses.