Bill Nelson on the Using the Discount Window for Liquidity Requirements and Its Implications for the Fed’s Balance Sheet
Macro Musings with David Beckworth
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Federal Reserve's Operational Challenges and Balance Sheet Evolution
Exploring the limitations of the Fed's operational systems like Fedwire during banking stress, emphasizing the need for 24-7 access for better liquidity management. The chapter delves into the historical evolution and complexities of the Federal Reserve's balance sheet, discussing challenges of oversupplying reserve balances and potential routes for balance sheet reduction. Analyzing the implications of liquidity requirements and operational framework changes, including discussions on central banks globally and the risks associated with maintaining a large balance sheet in different interest rate environments.
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