On July 12, 2022, we published a note that redid the FDIC’s recently published projections of the ratio of reserves to insured deposits with two changes to the FDIC’s assumptions: (1) We assumed that deposits would remain unchanged rather than grow in the near term.  (2) We assumed that the FDIC would earn 2.5 percent …

The Federal Reserve is currently obtaining a significant share of its funding through overnight reverse repurchase agreements with money market mutual funds.[1] The surge in borrowing from MMFs started in March 2021 when the Federal Reserve ended its temporary exclusion of reserve balances and U.S. Treasuries from the denominator of the supplementary leverage ratio that …

Ladies and Gentlemen: The Bank Policy Institute[1] appreciates the opportunity to comment on the Department ofTreasury’s Request for Comment on “Ensuring Responsible Development of Digital Assets” in connection with Executive Order 14067, “Ensuring Responsible Development of Digital Assets.”[2] According to the Fact Sheet accompanying the Executive Order, digital assets, including cryptocurrencies, exceeded a $3 trillion …

Stories Driving the Week The Bank of England Just Released Its Plan for Getting Smaller. The Fed Could Learn from it. What’s happening: The Bank of England this week provided new details on its plan to shrink its balance sheet. While press reports have been focused on the BoE’s plans to sell assets, the critical difference …