This is due to its ability to pay interest on bank reserves. (tsi-blog.com)
Meanwhile, Bernanke has made it clear that the most important tool of the Fed during the interim will not be liquidation of these securities, but instead the payment of interest on bank reserves. (hussmanfunds.com)
During the interim, the Federal Reserve indicates that it expects to limit the extent to which banks lend out the base money created in Step 1, through a policy of paying interest on bank reserve balances. (hussmanfunds.com)