There is a pretty simple plan in effect. From way back in the dim reaches of my college economics course I recall that basically all economies have a way to measure how efficiently money changes hands. The economists have equations to describe the
Velocity of money - Wikipedia, the free encyclopedia , but the important thing is that the closer to a "risk" venture the money comes the FASTER it pours through the system. If you take your cash to a normal bank they may loan out SOME tiny portion of it to slightly risky thing, like a company with a short history of operation, but MOST of it is going to very low risk things(like government securities and high quality mortgages). In contrast if you take that money and plunk it into a stock fund a whole lot more is going to happen to encourage firms to try and get something happening. THIS is what the authorities WANT to happen -- the only way to put the "humpty dumpty" of Wall Street (and ultimately the REAL firms that rely on stock to finance everything from airplane building to car making to discount retailing) back together is to get money back into the markets.
The Gov't is perfectly happy putting cash reserves into banks so that they don't go kerput, but the banks are too busy fretting over their still nearly impossible to value MBS to get into the "venture expansion" side of lending. That (or high inflation) are the only ways that banks could pay high interest rates on GUARANTEED accounts ( and I don't think anyone really wants banks to get back into the funny business of offering non-guaranteed options as they did in the Keating era...).
The purpose of the "high interest checking" is a bit sinister -- the banks want to FOOL depositors into leaving far more cash in a truly liquid state than sanity suggests is prudent. This is a sign that banks have a negative outlook for their own ability to meet capital requirements as set by the Federal Reserve and FDIC. In fact they are so fearful that people will try to get every last dime "earning something" in CDs (that the banks basically have no choice but to put only in government backed securities given the volatility of real estate and pretty much anything else) that they are willing to grossly overpay a hyper careful number of individual clients to potentially open / maintain demand accounts YET are unwilling to treat these customers to more than a paltry $1250 return. The caps at $25,000 mean that no one customer will really see this sort of account 'grow' to any significant extent, and it is very likely that transaction fees / errors will cause very few folks to even be paid this amount. The owners of such banks cynically look at what happened to a bank like Indy Mac where a pretty stupid Senator basically caused a collapse by eroding confidence and say "what can we do make customers keep more of their day-to-day money here?" , and the answer comes back "act like we are wlling to over pay LOTS of people a LITTLE bit" --
California mulls probing senator over IndyMac crash | Politics | Reuters
Personally such actions turn me off -- I like honest banks. If a bank tells me "look, checking accounts are money losers for us, but we'll do everything we can to put ATMs where they are convenient for our customers" I can respect that. I have no such feeling for banks that try and con me into thinking that there is some "magic path" to high returns. Debit cards are a menance -- all the convenience of a credit card with none of the protection!
Debit cards fuel overdraft outrages - The Red Tape Chronicles - MSNBC.com (http://redtape.msnbc.com/2007/01/debit_cards_fue.html - broken link)
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