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The Exchange Stabilization Fund and Exchange Rat Volatility
The exchange stabilization fund exists within the treasury department. It has been used for a variety of crises, but its statutory purpose is to support stable exchange rates. In two thousand eight, hank palson, then treasury secretary, used it to guarantee money market funds under the guise that stable money market funds would be better for exchange ratstability. I think there ogt peoplewill shudder at the notion of a using for this purpose,. But i think it's also a time when we really need to think seriously about what the supply implications of supply risks are on exchange rates and financial stability.