According to BlockBeats, on March 26, Federal Reserve Chairman nominee Kevin Warsh expressed his desire to significantly reduce the Fed's $6.6 trillion balance sheet. A top financial economist stated that he may need more than one term to accomplish this task.
In a new paper, Stanford Graduate School of Business professor and longtime advisor to the Federal Reserve, Darrell Duffy, argues that if the Fed wants to significantly reduce its influence in financial markets without causing serious stress, it needs reforms, including a radical overhaul of bank liquidity requirements and a redesign of the payment system. Once Warsh is confirmed by the U.S. Senate, he could immediately implement some of these reforms, provided he has the support of his colleagues.
Duffy indicated that other reforms could take up to five years, meaning this work will continue beyond Walsh's four-year chairmanship. (Jinshi)
