How Are Bank Reserves Affecting Monetary Policy?

The transcript discusses a technical question posed to Janet Yellen about the liquidity coverage ratio and its impact on bank reserves and monetary policy. It explores how these changes influence bank decisions, regulatory policies, and asset holdings. The discussion also covers the implications for balance sheet size, yield curves, and the global need for reserves, highlighting the choices banks make in response to these factors.

What are the potential consequences of large banks selling Fannie Mae and Freddie Mac?

In what ways might the central bank balance sheet be considered too small?