Lets talk about the #FED's #Outlook on #US & #Global #Growth & where it sees #MonetaryPolicy #Regulation & #Supervision going given the #Zero / #EffectiveLowerBound...
Yesterday, 6th February 2020, the #FederalReserve (FED) Vice Chair for #Supervision addressed the #Money Marketeers of #NewYorkUniversity in #NewYork. His address, in the form of a speech, was coined "The #Economic Outlook, #MonetaryPolicy, and the Demand for #Reserves"...
Considering that the #FED is one of the most influential #CentralBanks in the world, it pays to get as much information from them as possible, especially when it comes to #monetarypolicy conduct and the #Global impacts thereof...
In his address, the Vice Chair touched on the challenging #monetarypolicy environment in the #US & how the #FED is currently undertaking review of its monetary policy strategy, tools & communication practices to ensure efficacy in tackling any future contractions &/or #recessions
Over and above the "usual" discussion of #monetarypolicy around #zerolowerbound, (i.e. use of #UnconventionalMonetaryPolicy tools) the Vice Chair made a rather interesting connection between #bank #supervision and #regulation with monetary policy...
The gist of his discussion was on how the #FED's supervisory and regulatory role might work to aid #monetarypolicy efficacy in the current dispensation (i.e. historically lower policy rates). In particular, his address related to banks' demand for #reserves...
Colleagues in #CentralBank #Supervision departments will obviously understand the various aspects of #FractionalReserveBanking & why prudential conditions for #liquidity management are advanced to achieve & maintain #FinancialStability...
Defining traits of #FinancialSector #Regulatory #Supervision formed the crux of the Vice Chair's speech. In particular, the discussion expounded on key features of the #US' current liquidity regulation & supervision regime, especially their evolution following the 08 crisis...
A key question then becomes, in the current #MonetaryPolicy dispensation, wherein, the #FED will likely use Large Scale Asset Purchases #LSAPs to complement conventional tools, how would a shortage of liquidity in the market be serviced by the #FED?
In closing, to answer the question above, I would advice that on reads the full speech for themselves. Its all fascinating stuff... 😎 federalreserve.gov/newsevents/spe… 
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