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

It has some balance sheet effects that complicate the household sector’s problems and the nonfinancial corporate sector’s problems, and typically there are some balance sheet effects that threaten the banking system. Now, for sure, we don’t think that a depreciation in the dollar would have serious consequences for the U.S. banking system. In June I mentioned that, given the information we had, the balance sheet effects from a dollar depreciation appeared to be abroad rather than at home. Dollar-denominated assets would become less valuable abroad, but balance sheets in the United States would tend to be more or less dollar neutral because the dollar is on both sides. It would be a complicated picture. But the confidence effects and other aspects of the story depend very much on the precipitating shock.

Keyboard shortcuts

j previous speech k next speech