The decision by ECOFIN on November 25th to “hold in abeyance for the time being” the excessive deficit procedure against these countries has given rise to much talk about the status of the Pact.
First, cash availability. We do not see any need for a vast surge in demand for cash late this year, but if that should occur, it is the Federal Reserve’s responsibility to have available whatever may be required, and that responsibility will be met. An array of preparations are being made that will ensure currency will be available as needed in Federal Reserve vaults.