| http://www.w3.org/ns/prov#value | - Payment of interest on reserves may make banks less likely to create new bank deposits (to the extent that it reduces the opportunity cost of not lending), or more likely to do so(via the recapitalisation effect), and it may set a floor for the Fed funds rate, but I don???t see how it is anything other than a very blunt instrument in influencing the amount of currency held by the public.
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