Reserve Reductions, Money Markets, and Future Frameworks

September 28, 2018


After years of operating with expanded balance sheets and amidst an abundance of reserves, major central banks around the globe have begun or are looking ahead to a period in which they are likely to reduce their balance sheets as part of strategies to normalize the stance of monetary policy. These balance sheet reductions will reduce the amount of central bank reserves and impact money markets, which are central to the conduct of monetary policy. This process will be an opportunity to learn and add to our understanding of different monetary policy implementation frameworks.

This period raises a number of interesting questions that may provide insight around different approaches to monetary policy implementation. For example, as reserves shrink through the process of balance sheet reduction, how will money markets react and what will drive these developments? What will be the important impacts and risks for funding markets, both domestically and globally? More generally, in light of the impact central bank reserves have on money markets, what is the importance of well-functioning money markets, now and in the future? How does the global nature of dollar liquidity markets affect these considerations? Looking ahead, what are the trade-offs associated with different types of operating frameworks? How will these choices affect the eventual size of central bank balance sheets?

This workshop will bring together international experts in monetary policy design and implementation—academics, industry experts, as well as current and former central bankers—to discuss the impact of balance sheet reductions, the role and importance of money markets, and considerations for the design of future monetary policy implementation frameworks.

Event Details

Date & Time
September 28, 2018
11:00 a.m. - 5:30 p.m.

Columbia University
School of International and Public Affairs
420 West 118th Street
15th Floor
A conference jointly sponsored by Columbia University's School of International and Public Affairs and the Federal Reserve Bank of New York.

New York, NY 10027

The keynote speech by New York Fed President John Williams will also be available by livestream. It will begin at 4:45PM.


Welcome and workshop overview
Session 1
Impact of reductions in reserves
Facilitator: Lorie Logan, Federal Reserve Bank of New York
Arvind Krishnamurthy, Stanford Graduate School of Business | Presentation
Cornelia Holthausen, European Central Bank | Presentation
Terry Belton, JPMorgan Chase | Presentation
Session 2
Role of money markets
Facilitator: Patricia Mosser, Columbia University
Gary Gorton, Yale School of Management | Presentation
Seiichi Shimizu, Bank of Japan | Presentation
Zach Pandl, Goldman Sachs | Presentation
Session 3
Considerations for future implementation frameworks
Facilitator: Thomas Laubach, Federal Reserve Board of Governors
Willem Buiter, Citigroup | Presentation
Paul Fisher, former Bank of England | Presentation
Jim Hamilton, University of California, San Diego | Presentation
Keynote speech
John Williams, Federal Reserve Bank of New York | Speech

Audience is by invitation only.

Conference Organizers
Patricia Mosser, Columbia University
Julie Remache, Federal Reserve Bank of New York
Antoine Martin, Federal Reserve Bank of New York

This event is open to the media. Chatham House Rule will be in effect for all but the keynote address; media may report on comments made during the event, but may not attribute remarks to individuals or organizations. To register, please contact Suzanne Elio at the New York Fed, suzanne.elio@ny.frb.org

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