[JumpCrisscross]

For net transaction accounts, i.e. “demand deposits, automatic transfer service (ATS) accounts, NOW accounts, share draft accounts, telephone or preauthorized transfer accounts, ineligible bankers acceptances, and obligations issued by affiliates maturing in seven days or less”.

This isn’t a wholesale elimination of reserve requirements.

[keithwhor]

So — checking accounts for businesses and consumers...?

This does not sound great. Can somebody clarify as to how this is a sensible move at all / what the intention is?

[Spooky23]

They are trying to keep banks liquid to avoid a panic and closure. People are already starting to pull cash.

This is a 9/11 like event, except the impacts are nationwide, not just in the NY Metro area. Companies and people are just going to stop paying bills. I'd guess you're looking at 2-4 million people out of work in the next week. The only saving grace is that this season is a low business period for retail and other sectors anyway, but they'll start dying in the summer.

[JumpCrisscross]

> Can somebody clarify as to how this is a sensible move at all / what the intention is?

It's sensible because it's low risk. The intention is to alleviate pressure on the short-term lending markets, e.g. the repo and Fed Funds markets. This is about preventing a credit crisis moreso than juicing the taps.

[jellicle]

Perhaps you can explain why reducing all reserve requirements to 0% isn't a "wholesale elimination of reserve requirements".

[nybble41]

Do you have an example of an account type that still has a non-zero reserve requirement? Because that list sounds quite a bit like the list of accounts where reserve requirements (used to) apply. IIRC there were no minimum reserves for time accounts like savings accounts or CDs.