I thank Marco Bassetto, V. V. Chari, Ron Feldman, Futoshi Narita and Juan-Pablo Nicolini for their comments. The views I express here today are my own, and not necessarily those of others in the Federal Reserve System or my colleagues on the Federal Open Market Committee. Sargent and Wallace published their classic “Some Unpleasant Monetarist Arithmetic” in the Minneapolis Fed’s Quarterly Review in 1981.
In addition, the Board prohibited financial holding companies from owning commodity transportation, storage, extraction, or refining facilities under complementary authority. Moreover, companies are required to demonstrate risk-management processes sufficient to support their activities and to put in place additional risk mitigants, such as insurance.