The Discount Window Isn't an Effective Cap on Liquidity

Bill Nelson is the chief economist and executive vice president at the Bank Policy Institute. He previously worked as a deputy director of the Division of Monetary Affairs at the Federal Reserve Board, where his responsibilities included monetary policy analysis, discount window policy analysis, and financial institution supervision. Bill has also worked closely with the BIS working groups on the design of liquidity regulations and is a returning guest of the podcast. He rejoins David on Macro Musings to talk about his new note that is titled, *Bank Examiner Preferences are Obstructing Monetary Policy*. David and Bill also discuss how the Fed’s forward guidance is affecting recent market turmoil, how to change the mindset of bank examiners and the public, why the Fed should look into establishing a committed liquidity facility, and more.

Transcript for the episode can be found here.

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Related Links:

*Bank Examiner Preferences are Obstructing Monetary Policy* by Bill Nelson

*Quantifying the Costs and Benefits of Quantitative Easing* by Andrew Levin, Brian Lu, and Bill Nelson

FRED Graph: *Liabilities and Capital: Liabilities: Earnings Remittances Due to the U.S. Treasury: Wednesday Level*

*The Global Financial Cycle* by Silvia Miranda-Agrippino and Helene Rey