Thank you, Brian. By way of background, the Greenbook and many private forecasters project a sizable drop in real GDP from mid-2008 to mid- 2009, followed by sluggish growth into 2010, even with short-term interest rates barely above zero and with substantial fiscal stimulus. The Board staff and the median ...

Basically everything clears through their equivalent of Fedwire, so they know in real time what the balances are.

Though they had a few trades above their lending rate, in fact that was not much of a problem. Their system worked quite well. Interestingly, the country with the smallest rate volatility during the whole period of market turmoil was Canada, and that’s because they knew the demand for ...

Quite dramatically, to avoid the end-of-period spike in rates. In terms of rate volatility, the Bank of England, the ECB, and the Fed all achieved about the same rate volatility during the period of market turmoil. For the Bank of England, the spikes just tended to be more on the ...

With respect to the U.K. system during the period of turmoil, banks’ initial reaction was to lower their reserve deposits, their contractual commitments. But they came to their senses and realized that holding more rather than less was a more sensible approach, and the Bank of England accommodated the ...

As Brian noted, I will summarize our current approach. As indicated on page 7, I will discuss depository institutions’ demand for central bank balances, how the Desk manages the supply of balances, and outcomes in the federal funds market. There are three components of demand. Some depository institutions (DIs) hold ...