Bullard offers alternatives to cutting reserve bank dividend
St Louis president takes issue with proposal to cut dividend to largest banks
The dividends paid by Federal Reserve banks could be made more flexible – or even eliminated altogether – as an alternative to lowering the rate paid to the largest member banks, St Louis Fed president James Bullard has said.
Each year the reserve banks pay a dividend to the ‘member banks' that provide their capital. As part of efforts to fund transportation projects in the US, some lawmakers are advocating the dividend is cut to 1.5% for any member bank with more than $1 trillion in assets.
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