Odaily Planet Daily reports: On Thursday, Dallas Fed President Logan outlined the path and options for reducing the size of the Federal Reserve’s balance sheet, while noting that the current system is operating well and will benefit overall financial stability. Logan said the current system the Federal Reserve uses to manage financial liquidity is designed to provide “ample” reserve levels, and that the system is “efficient and effective.” However, even under the current system there are still multiple ways to help reduce the Fed’s holdings, and many of these measures involve rules governing how financial institutions manage cash reserves. Recent research both inside and outside the Federal Reserve has pointed out that, by adjusting regulations to encourage banks to hold lower reserve levels, the Fed could further shrink its balance sheet under the current system. Logan said she agrees, adding that the Federal Reserve is doing work to make reserve management “more efficient” during periods of stress. She also said that while some liquidity rules increase reserves, they do not improve safety, because banks are unwilling to use these reserves during a crisis. “This is an inefficient use of the Fed’s balance sheet, and we can completely avoid this situation.” (Jin10)
連邦準備制度理事会のローガン：規制の変更によってバランスシートを縮小できる
Odaily Planet Daily reports: On Thursday, Dallas Fed President Logan outlined the path and options for reducing the size of the Federal Reserve’s balance sheet, while noting that the current system is operating well and will benefit overall financial stability. Logan said the current system the Federal Reserve uses to manage financial liquidity is designed to provide “ample” reserve levels, and that the system is “efficient and effective.” However, even under the current system there are still multiple ways to help reduce the Fed’s holdings, and many of these measures involve rules governing how financial institutions manage cash reserves. Recent research both inside and outside the Federal Reserve has pointed out that, by adjusting regulations to encourage banks to hold lower reserve levels, the Fed could further shrink its balance sheet under the current system. Logan said she agrees, adding that the Federal Reserve is doing work to make reserve management “more efficient” during periods of stress. She also said that while some liquidity rules increase reserves, they do not improve safety, because banks are unwilling to use these reserves during a crisis. “This is an inefficient use of the Fed’s balance sheet, and we can completely avoid this situation.” (Jin10)