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Should the Fed Push Banks to Lend More?

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    Former Fed Governor Wayne Angell on what the Federal Reserve should do to boost the economy.

  • Duration 3:41
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This transcript is automatically generated

We have a former Federal Reserve governor.

Who says for can't twist and quantitative easing.

I think he says.

He has a better solution that we need you to concentrate here because former fed governor Wayne Angell.

He's going to outline it for us in a Fox Business exclusive before we get to that Wayne good to see you thank you for being with us we love having you.

I'll explain what you thought when you heard the announcement and the decision if you didn't already know.

Well what I thought was that care.

The Fed didn't do the worst they could've done the worst thing could have done would have rendered -- QE3 -- they didn't hear that -- -- has.

But it's very very unfortunate to -- all these excess reserves.

-- Act at at the Federal Reserve the Federal Reserve -- 45 basis points.

More brains that keep reserves at the -- Well borrowers are bond risk.

Decisions to -- the money.

Sterile looking bad and it got 25 basis points from me that means that banks are not gonna go out and -- to -- where else.

Project may not in this environment.

Two to which they would say I'm sure hey we're still making money at the Fed but.

We have two point seven trillion dollars that they have been in government and mortgage bonds that they've been buying up.

Why is -- biggest monetary stimulus in the entire history of the Federal Reserve board.

Doing so little to actually stimulate growth in the economy.

Billion is doing so level.

Because.

That 25 -- -- of banks are paid.

For holdings -- reserves are above.

There opportunity rate -- return.

At and and they're not wanting to go out and take risk.

And that's and I'm not a Basel III AM and regulatory oversight.

So they share my god -- -- -- -- -- -- bad.

And guess what -- -- prices.

More so when Jamie Dimon says we've been lending.

It is he not being honest about that somebody's bankers so -- -- more out there lending instead you're saying they're leaving it.

-- derelict the Fed instead of doing what they should be doing that's getting out there lending just a little bit more not irresponsible lending certainly but.

What and -- -- saying that the Fed should make it a lot.

More difficult for them to just.

Park their money there.

That's right and so.

If I'm -- the rate of return.

That -- -- for a parking your money.

At the bad.

From -- five basis point to say get raises boards or even zero would be up possibly move.

That would get this economy going.

Alright well -- in there isn't even more aggressive policy that is just been taken by the Bank of England where they actually reward some would say bribe banks.

To lend out commercially to lend out money and as opposed to just using the cheap money that they're getting on on various -- Today.

Ben Bernanke was asked about this program and suggested that he is entrusted in that he didn't say.

He was gonna sign onto it but suggested that he might apply that here -- essentially banks would get cheap loans cheaper than they already are if they agreed to lend it out commercially.

What do you think.

Idea that heart rate for that and other words your take the -- five basis points.

That the baggage can't.

For saving their money star home.

And -- giant Lockheed here in you have money and of bad.

We're gonna -- into what a -- basis points I was so you could do bats are you gonna get lending going at this duo won't.

And I think Bernanke won't find they can't John.

To doing that very.

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