It would also need to ensure that even amid shocks to non-reserve liabilities, the supply of reserves would stay on the flat part of the demand curve.” And: “An important trade-off in a floor system arises between the size of that additional buffer and the frequency and size of open market operations.
In the current floor framework, the buffer is more than large enough to absorb shocks without the need to conduct offsetting open market operations.” 28 Adapted from: Hauser, A. (2021, September 13). Bigger, broader, faster, stronger? How much should tomorrow’s central bank balance sheets do – and what should we leave to financial markets? Some principles for good parenting [speech].