The redemption or sale of securities would have the effect of reducing the size of the Federal Reserve’s balance sheet as well as further reducing the quantity of reserves in the banking system. Restoring the size and composition of the balance sheet to a more normal configuration is a longer-term objective of our policies.
It might seem at first that the question is purely academic since it hardly appears within the realm of political feasibility that national currencies would ever be abandoned in favor of any other arrangement.” Robert A. Mundell (1961, p. 657) It is an honor for me to address such a distinguished group on the occasion of the euro’s fifth anniversary.