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

Thank you, Mr. Chairman. Just to answer the questions that were posed, I am comfortable with options 2 and 5, but I thought President Lacker’s presentation made the case that option 4 deserves to remain in the mix. I think the objectives are appropriate. The only comment I have—and this is a bit vague, I realize—is to ensure that we are thinking far enough ahead to ensure that we have a durable system that can operate in different mixes of private and public in the payment system. Certainly, I think it is conceivable that in some years we will be out of the business of retail payments, so I think we have to address different mixes of private and public payment systems.

Regarding the timeline, Governor Kohn already asked the question about approaching the Congress to accelerate. Assuming that we do not approach the Congress to accelerate this, then this timeline seems to me quite comfortable and gives plenty of time for very careful consideration.

In the room here is Will Roberds from our research staff, who by chance was at the Bank of England talking about their experiences recently. I thought I would share a couple of things that are apropos. They tried maintenance periods other than the intermeeting period, and they found them to be not so effective, apparently because of ambiguity around the target rate. That is a useful way of thinking—that the maintenance periods would be designed around the intermeeting period. They apparently tried option 3, and it didn’t work because of too much volatility within the corridor. Those two tidbits are feedback from the visit of a member of my staff to the Bank of England. Thank you, Mr. Chairman.

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