Fed’s Barr: Easing liquidity regulations to reduce Fed balance sheet not advisable
The post Fed’s Barr: Easing liquidity regulations to reduce Fed balance sheet not advisable appeared on BitcoinEthereumNews.com. Federal Reserve (Fed) Governor Michael Barr said that lowering liquidity rules to get the central bank’s balance sheet smaller is a bad idea and could undermine the safety of the financial system, Reuters reported on Thursday. Key quotes Easing liquidity regulations to reduce Fed balance sheet not advisable. Reducing liquidity requirements would just heighten stability risks. Reduced balance sheet may boost funds to Fed liquidity facilities. Reduced Fed balance sheet would probably boost Fed interventions. Fed working to shift balance sheet duration to align with broader Treasury market. Doubtful liquidity coverage ratio adjustment will significantly impact reserve demand. Monetary policy toolkit has been effective for a long time. Effective monetary policy execution revolves around rate management. Generating reserves doesn’t cost the Fed. Liquidit