Bloomberg reported former Federal Reserve co-director of research James McAndrews is heading TNB, USA, which is designed to allow institutional advisors to park deposits at the Fed. But the Fed is not pleased with this new development.
According to Bloomberg, McAndrews is now suing his former employer to force the Fed to let TNB (The Narrow Bank) open an account that earns the same top-tier interest rate currently available only to a select few, which it will then pass on to depositors. Bloomberg added, if the suit is successful, TNB could disrupt America’s multitrillion-dollar short-term funding markets, the rates hundreds of millions of Americans get on their savings, and some say the Fed’s policy setting mechanism itself.
