As I look at the topics on the agenda, I am struck by how similar the regulatory capital framework is to the corporate and bond rating approaches to capital that you are discussing. In fact, one of the continuing challenges financial officers face is relating the different levels of capital that regulators and business strategy require.
Taking into account the actual role of the interest rate on reserves, the Federal Reserve has proceeded with the normalization of monetary policy by providing a new means of absorbing funds, namely reverse repos, which forms a floor on the federal funds rate. Here, new practices have been created to raise interest rates with abundant liquidity in the financial system.