Used to be, risk begot reward. True, not taking certain risks could sometimes bring rewards. But by and large, throughout history, fortune has favored the bold.

But as testament to how far the paradigm has shifted in just the past few years, it seems that now, fortune (literally) favors the passive.

For years, economists have bemoaned the fact that companies and financial institutions are simply sitting on massive piles of cash, unable – or, more likely, unwilling – to lend it out or make productive use of it. If these entities would just deploy those trillions of dollars, the national and global economies would be in much better shape.

But why take the slight risk involved in deploying that capital when there is some nominal reward – especially for financial institutions – in simply letting it collect dust? Especially when, in this case, that dust takes the form of lucrative compound interest?

In order to provide adequate liquidity as a cushion against their loans, banks have long been required to maintain a certain level of capital reserves with the Federal Reserve. Historically, banks kept the minimum amount allowed with the Fed, since keeping anything above minimum reserves meant taking money away from the amount they could lend. Additionally, these reserves – both required and any excess – never earned interest. Keeping money with the Fed for long periods of time actually ended up costing banks as inflation rose and eroded the value of that cash.

Except in 2008, that all changed.

In October of that year, as investment banks were imploding and many banks faced collapse as a result of not enough liquidity, the Fed began paying interest on those reserves. At the time, one can imagine the Fed thought it was good policy to incentivize lenders to re-build their reserves in any way possible. And what better way than to pay them for it?

But after four years, the policy isn’t working anymore.

The Fed currently pays 0.25 percent interest on required and excess reserves. That may not sound like a lot, but it’s not nothing, either. Two-year treasury bonds have been paying less recently. And the return on lending that excess cash to other banks has been as low as 0.13 percent in recent months. An interest rate of 0.25 percent, compounded daily, on an initial deposit of $1 billion nets the account holder more than $2.5 million in “profit” after just one year.

So getting 0.25 percent for essentially doing nothing starts to look pretty good.

It looks doubly good when one considers that inflation – historically the last remaining barrier to just sitting on cash – has largely been a non-factor of late. Some economists say they are actually seeing signs of deflation in the monetary supply, which makes those piles of cash effectively even bigger – again, all without doing a thing.

Compounding the policy problem is the fact that new Basel III regulations will ostensibly require banks to keep even more cash on hand. Thus far, banks have been saying all the right things about how those regulations will cut into their ability to lend. But once that interest dust starts accruing, it could make for a decent consolation prize.

Stopgap measures put in place in 2008 to try and re-create a safety net for a staggered industry no longer work as we shift from a damage-control phase into rebuilding mode.

The Fed ought to give its bank depositors a taste of their own medicine. Begin charging monthly “maintenance fees” on excess deposits, just like banks do to their own depositors. Eliminate interest on those deposits altogether – again, just as many banks have seemingly eliminated interest-bearing checking accounts.

Be eliminating the reward for inaction, the Fed could force banks to take the risks that made them succesful in the first place.

Or it can do nothing. And we all can get nowhere.