It encourages member banks to loan out their money instead of paying a fee for depositing it.
Which normally, banks wouldn’t need that encouragement. Putting money to work and keeping it earning interest is literally what they do.
That’s why its an extremely rare combination of factors that have to arise…the member banks have too much cash, and they have to stop lending it out to make interest. Which basically would only occur in a desperate, panic based situation.
Only if the Supreme Court says so. They are the final stop.
That’s why stacking the courts with conservatives has been so important.
Maybe, maybe not. This is how Nixon was brought down. They “followed the money”. The receiver is going to want all of his cash, as you might well believe. That money will show up somewhere.
It happened during the 2008-9 meltdown. (I don’t think rates went negative in the US, but there were negative bonds in the euro world iirc) because holders of money suddenly realized they had no idea who was an OK risk, even overnight. So if your expected loss from borrowers going belly up is large than the loss you take by making a negative-interest deposit at the bank of last resort, that’s what you do. How bad was it? The big banks were issuing bonds that paid 12-14%, with 2-4% representing regular interest and the rest representing the risk that they wouldn’t repay.)
OT but kudos to Josh Kovensky for the reporting he has done on all of this!!!
It probably is Russian oligarch money going through a domestic swindler.
Domestic swindlers do not give away their hard earned swindles. For a fee they will launder somebody else’s swindle.
So it now appears.