What Gov Can Do (Realistically)?

make all banks mark to market and suspend the fed paying interest on reserves.

Both of those coupled together are not helping libor come down as banks don't know what other banks have on their books so they are cautious to lend to each other and that cautiousness is rewarded by hoarding reserves that FED pays interest on.

 

Expect that to come out around christmas and it will be called the Christmas Preservation Act