Nonetheless, it would be helpful to prevent a further increase in the volatility of the effective federal funds rate that might result from a further sweep-induced decline in required reserves. And a means is available to the Congress today to accomplish that end: The Federal Reserve should be permitted to pay interest on reserves.
At the macroeconomic level, in particular, the pivotal role of certain agents and their influence on financial markets – in other words, their systematic importance – was underestimated for too long.