New York Fed announces new reserve ampleness calculation tool
Bank’s president says new product will provide early-warning signs about reserves’ scarcity
The Federal Reserve Bank of New York is to publish its reserve demand elasticity calculations monthly, its president John Williams announced yesterday (October 17).
The New York Fed has argued since 2022 that real-time calculations based on its balance sheet could provide early-warning signs of aggregate reserves in the banking system transitioning from “abundant” to “ample” or from “ample” to “scarce”.
Williams and his co-authors Gara Afonso, Domenico Giannone and Gabriele La Spada explained the
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