This discussion was prepared for the 84th Meeting of the Carnegie-Rochester-NYU Conference Series on Public Policy "Monetary Policy: An Unprecedented Predicament" held on November 14-15, 2014, at Carnegie Mellon University.

Bank reserves in the United States increased dramatically at the end of 2008. Subsequent asset purchase programs in 2009 and 2011 more than doubled the quantity of reserves outstanding. These events required major adjustments in banks' balance sheets. We study the evolution of reserve holdings...

I study a non-stochastic, perfect foresight, general equilibrium model with a banking system that may hold large excess reserves when the central bank pays interest on reserves. The banking system also faces a capital constraint that may or may not be binding. When the rate of interest on...

It is often the case that banks in the US are willing to borrow in the fed funds market (the interbank market for funds) at higher rates than the ones they could obtain by borrowing at the Fed's discount window. This phenomenon is commonly explained as the consequence of the existence of a...

The repo market in the United States played a significant role during the 2007–2009 global financial crisis. A large portion of the transactions in this market take the form of a tri-party repo, where a third party (a clearing bank) intermediates between the borrower and the lender. The sudden...

The instability of money market mutual funds is a subject of active debate. A new regulatory framework is likely to be implemented soon in the United States. The design of such a framework should depend on an assessment of which is the main economic function fulfilled by these funds. If money...

Bank reserves in the United States increased dramatically at the end of 2008. Subsequent asset purchase programs in 2009 and 2011 more than doubled the quantity of reserves outstanding. We study the cross-sectional distribution of reserves in that period, and the relationship between holdings of...

The repo market in the United States played a significant role during the 2007–2009 global financial crisis. A large portion of the transactions in this market take the form of a tri-party repo, where a third party (a clearing bank) intermediates between the borrower and the lender. The sudden...

The money market mutual fund (MMMF) industry was one of many segments of the financial sector that experienced significant volatility during the 2007–08 financial crisis. Reform efforts have been underway to make the industry more resilient to shocks, but proposals have been controversial....