ANALYZE BANK RESERVES

MAR 23, 2026Mercatus Center at George Mason University

Bill Nelson on the Future of the Fed's Balance Sheet

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The QE Ratchet Effect - Nelson explains how the Federal Reserve's balance sheet tends to expand during crises but fails to return to previous levels due to shifting institutional and regulatory dependencies.
•
Strategies for Normalization - The discussion details specific mechanisms the Fed can use to shrink its footprint and move back toward a leaner, market-based operational framework.
•
Bank Liquidity Preferences - Insights from the BPI Bank Treasurers Survey reveal how regulatory requirements and internal risk metrics drive the ongoing high demand for central bank reserves.

MAR 23, 2026Mercatus Center at George Mason University

•
The QE Ratchet Effect - Nelson explains how the Federal Reserve's balance sheet tends to expand during crises but fails to return to previous levels due to shifting institutional and regulatory dependencies.
•
Strategies for Normalization - The discussion details specific mechanisms the Fed can use to shrink its footprint and move back toward a leaner, market-based operational framework.
•
Bank Liquidity Preferences - Insights from the BPI Bank Treasurers Survey reveal how regulatory requirements and internal risk metrics drive the ongoing high demand for central bank reserves.