This run-up in Federal Reserve assets and bank reserves will also need to be unwound over time, with possible consequences for the structure of interest rates. Another message I hope to convey today is that many banks, thrifts, and credit unions may be exposed to an eventual increase in short-term interest rates.
Claims by some observers that the Bank has somehow “thrown away” taxpayers’ money by intervening simply do not stack up. BIS Review 73/2007  1  FX intervention is a supplementary monetary policy tool and is considerably less potent than the central OCR instrument which has an important influence on the trend of the exchange rate.