Commercial Banks Taper Treasury Purchases | Joseph Wang & DC Analyst
Forward Guidance
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The Banks' Balance Sheet Future
One thing they could do, of course, is just exempt treasuries from their SLR. That could mean theory give them more balance sheet to buy treasuries like Jack suggested. It would be a very bad policy, but they could do it if they wanted to have a bid in the treasury market. So we'll have to see how much people are willing to move their deposits away from banks to seek out alternatives. And that will also be a factor that determines what the banks can do.
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