Dudley now answering questions.
- Higher capital requirements not meaningfully restraining bank lending.
- Fed’s full allotment fixed rate reverse repo facility will allow Fed to control level of money market rates
One would expect that anyone with access to this facility will generally be unwilling to lend instead to someone else at a rate below that posted for the facility.
Repo facility may reduce volatility of short term interest rates but development of facility shouldn’t be taken as an element of exit process
