I will also discuss ways we can manage the link between the size of the Federal Reserve's balance sheet and the broader money supply during the transition back to a more familiar framework for monetary policy. Our capital, the difference between assets and liabilities, is about $ billion.
In particular, we are assuming that the rate at which new debt is taken on will slow down as compared with the nineties, and that increases in interest rates will have a bigger impact on consumption expenditure and even on new house-building than in the nineties. 5  BIS Review 25/2000  Of course, we could be wrong on this assumption, in either direction.