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Otherwise excellent lecture but I find this argument about the "costs" of large fx reserves pretty unconvincing.

bis.org/speeches/sp190…

Why should they care particularly about paying more interest in the domestic currency? 1/N
Why is the additional interest cost from increasing reserve balances/selling securities so much worse than the interest already paid? It seems to me this is more of an issue of the high interest policies themselves. 2/N
It seems to me that this suggests a carefully planned shift towards direct credit regulation and away from interest rate adjustments is a good idea rather than accumulating fx reserves is "too costly". I'd be more convinced by trade surplus arguments. 3/3
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