Transcripts of the monetary policymaking body of the Federal Reserve from 2002–2008.

Thank you, Mr. Chairman. There are just two other observations I want to share. They aren’t direct questions, just sort of my thoughts on this. In general, I am okay with the extension to the 84 days—I don’t think that is problematic. As I mentioned before in our meetings, I really would like to see some more clarification and standards applied to what the Board and the staff mean by “unusual and exigent circumstances,” how we define that term and how we know when it is time to take it off. I understand that there is stress in the marketplace. I am not disputing that. But I think as we go forward—and following up on President Hoenig’s point—it would be useful if we had a way of discussing more explicitly the criteria that we use to put this on or take it off. So at some point I would like to have some discussion about that.

The other point I would make is that I am just not persuaded by the staff’s arguments about the options. The TSLF is undersubscribed. If we wanted to make loans available, we could offer more-frequent auctions. We aren’t tied to any particular two-week schedule. We could offer auctions near the end of the quarter. I am just not convinced that this is going to provide much to the marketplace. Even the staff suggested that it might be marginal. The more we tweak and change these things and try to provide things that we don’t know whether they are needed, I am not persuaded that they are adding anything. I think the 84 days runs over quarter- end. There are auctions as much as one week or two weeks before quarter-end every quarter. There are funds available. So I am just not sure that this is necessary. Thank you.

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