o  Raised interest rates  o  Tightened liquidity  o  Issued credit guidelines  o  Tightened borrowing limits by non-residents  However, monetary policy is not enough because: o  Heavy reliance on monetary policy will result in further interest rate increases  o  The full effect of interest rates on demand takes a long time  o  Further interest rate hikes could slow and dampen investment  •  Hence, monetary and fiscal policies must work together and share the burden of sustainability  •  Fiscal policy has a greater influence on the economy: o  Fiscal decisions have an immediate impact  o  The impact is also greater than monetary policy  •  While, the higher fiscal deficits in the past worked well to raise economic growth, we now need to relook at our strategy to secure sustainability  4.
Congress further expanded the role of the Federal Reserve in the payments system in 1987 when it enacted the Expedited Funds Availability Act (EFAA). For the first time, this act gave the Fed the authority to regulate check payments that were not processed by the Federal Reserve Banks.