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Fed researchers propose another policy tool

Segregated balance account could supplement the other mechanisms for raising rates
Monday, June 1, 2015 - 05:50
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EASE THE BURDEN: The proposal would reduce the Fed's need to transact directly with shadow lenders.

New York

THE Federal Reserve Bank of New York's research chief detailed the case for an additional policy tool to raise interest rates that would reduce dealings with the shadow-banking system when the time comes to do so.

The tool, called a segregated balance account, could be