McCarthy also said even if the ballot measure passes, the sales tax increase won't completely fix the deficit problem; it would only slow down the bleeding and stop
draining reserve funds so quickly.
When it does so, it debits the Federal Reserve account of the depository institution receiving the currency, thus
draining reserve balances from the depository system.
On the monetary front, however, they warned that if the Bank of England begins to raise interest rates without rst
draining reserves then they may nd that broad market rates are not as responsive to policy changes as would be hoped - an issue which could create uncontrollable distortions.
Patterson presented to the board a history of the Foundation's income from the IOTA program, its efforts to build reserves, and how the recession and resulting nearly nonexistent interest rates decimated its prime source of income, thereby
draining reserves.
Two tools for
draining reserves from the system are being developed and tested and will be ready when needed.
When the credit policies were adopted, it was well understood that unwinding the policy accommodation would likely benefit from having new and enhanced tools for
draining reserves.
I would argue that this language contains much more direct and valuable information about the likely path of the short-term interest rate target than does any decision about
draining reserves.
The governor is worried that legislators, eager to keep their constituents happy in an election year, would seek ways to paper over the shortfall -
draining reserves, shifting funds forward from future budget periods and using other devices to avoid deep cuts in state services.
The Fed will have the additional task of
draining reserves and will use a set of instruments to accomplish this.
Other Fed officials have suggested alternative methods such as raising the interest rate the central bank pays on bank reserves or relying on
draining reserves directly from the system through short-term transactions.
These data indicate that the Desk's actions were not exactly as prescribed by the operating procedure: They generally added less than indicated when the procedure called for adding reserves and drained less than indicated when the procedure called for
draining reserves.
Walking a financial tightrope, officials say they will put off rate hikes for one year and cover a projected $112 million deficit by
draining reserves to just $66 million by the end of the budget year.
