Fed researchers aim to address uncertainty over demand for reserves
Demand for reserves could be between $712 billion and $919 billion, researchers find
Federal Reserve researchers have used a new approach to tackle some of the uncertainty surrounding the Fed’s survey-based estimate for the demand for reserves.
Joseph Andros et al use results from a question in the Fed’s August 2019 Senior Financial Officer Survey, which asked banks to reveal their lowest comfortable level of reserves. The results suggested the demand for reserves was roughly $800 billion.
The researchers use this point estimate and add two additional factors to help address
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