Americans lost out on $420B in bank loans because of the Federal Reserve, new research says

Jan 14, 2025

In the years after the Great Recession, banks chose to keep some $420 billion in their reserves rather than loan it out to American people and businesses. While many tend to blame the banks themselves for that decision, one Wall Streeter-turned-academic is pointing the finger squarely at the Federal Reserve's decision to pay interest on banks' excess reserves.