The problem is that the banks don't want to lend and I don't think they want to buy stocks/bonds right now. They are in the process of making money and I doubt they would do things that would do anything outside of that. The reverse repo facilities are more for providing liquidity to the market and I don't think it's bad.
Posted Using LeoFinance Beta
I politely disagree. As mentioned bank customers who deposit money into the banks. Those same banks take the money and put it in reverse repo to earn 3%. We as the customers don’t see the 3% in bank saving accounts, lucky even at 2%, so banks make dollars doing arbitrage and taking on zero risk. Dirty financial engineering if you ask me. !LOL !PIZZA
Yes they do earn money off the arbitrage but it's not always the case. In a way, the money is also a liability to them as they are only allowed to hold a certain amount of money but I do agree that it is scummy though.
Posted Using LeoFinance Beta