BlockBeats News, March 26 — Federal Reserve nominee Kevin Walsh hopes to significantly reduce the Fed’s $6.6 trillion balance sheet. A top financial economist said it might take more than one term to accomplish this.
Darell Duffy, a Stanford Business School professor and long-term Fed advisor, pointed out in a new paper that if the Fed wants to reduce its influence on financial markets substantially without causing severe pressure, reforms are needed, including a complete overhaul of bank liquidity requirements and redesigning the payment system. Once Walsh is confirmed by the U.S. Senate and receives support from colleagues, he can immediately implement some reforms.
Duffy said that other reforms could take up to five years, meaning this work could extend beyond Walsh’s four-year chairmanship. (Jin10)
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