Federal Reserve Governor Christopher Waller has proposed the creation of a “skinny” master account for payment services that would be easier to obtain than a regular master account. Waller explained that his proposed payment account would provide basic Fed payment services to legally eligible institutions that conduct payment services primarily through a third-party bank that has a full-fledged master account.

“Payments innovation moves fast, and the Federal Reserve needs to keep up,” Waller said.

He emphasized that it is a “possible prototype” emphasized that the Fed would not pay interest on balances in a payment account, and balance caps may be imposed. He also emphasized that the accounts would not have daylight overdraft privileges and would not be eligible for Fed discount window borrowing.

Author: sdbrownlow

Student of Design