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NOOK Book. The Change We Choose: Speeches brings together the key speeches made by Gordon Brown during the first two and a half years of his premiership. It reflects how the values and beliefs that have defined his political career have shaped his response to what have been arguably some of the greatest challenges ever to have faced a new prime minister. The speeches in this book trace what will be seen by historians as an extraordinary era in British and international history.
We can learn a lot about his premiership by looking at the Prime Minister's penetrating and insightful speeches in this period, as he sets out his thinking on domestic and foreign policy and responds to the events that have shaped his time in office. We also learn much about Gordon Brown, the man, from the insights of those who have kindly agreed to contribute introductions - and from the person who knows him best of all: his wife, Sarah, who introduced his party conference speeches.
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Shop Books. Read an excerpt of this book! Add to Wishlist. USD Sign in to Purchase Instantly. Explore Now. Buy As Gift. Overview The Change We Choose: Speeches brings together the key speeches made by Gordon Brown during the first two and a half years of his premiership. Product Details About the Author. Gordon has published numerous other titles. Average Review. Write a Review.
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Related Searches. Alex Ferguson: A Light in the North. Since joining the Dons in , the ambitious, hard-driving and controversial View Product. From running with the infamous Calton Tongs to running Calton Athletic, David Bryce's life story is a remarkable account of crime, violence, alcoholism and drug addiction in Glasgow's gangland. Fed purchases to date have run at more than two times the net issuance of securities in this market.
In the securities with 4 percent and 4. In other words, the Fed has been a substantial presence in these markets and has accordingly left a big footprint. Another reason for the large impact on MBS rates, in particular, is that the market began from a point of substantial spreads—ones that were well above market norms. As the purchase program has progressed, the MBS spread has fallen to levels that are narrower than its historical average, and the liquidity considerations have turned completely in the other direction.
Indeed, one issue that the Open Market Desk at the New York Fed now faces is whether its purchases are so large that they reduce market liquidity. The program has to strike the right balance between being large enough to have a meaningful impact on rates, but not so large that it impairs market functioning.
As just noted, the LSAPs appear to have been successful in generating an effect on rates, and we are also taking steps to try to limit the adverse effects on market liquidity. Winding Down the Asset Purchases The apparent success of the LSAP programs has a flip side, in that we must consider how market pricing will evolve during and after the termination of the programs.
This brings me to the second question that I consider: Will markets have an adverse reaction as the Fed winds down its purchases?
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One key issue in this regard is whether the market effects mentioned before arise from stock or flow effects. The portfolio balance effects discussed earlier would presumably be associated with changes in the expected stock of assets held by the public. However, we want to allow for the possibility that the flow of asset purchases, or the ongoing presence of the Fed as a significant buyer, may also be relevant for market pricing.
On theoretical grounds, it would seem that the main impact of the Federal Reserve purchases reflects stock effects. However, flow effects could matter as well, particularly given the very large MBS purchases we have been making. The bottom line is that we cannot be absolutely sure about the degree to which market effects arise through one channel or the other.
For that reason, the FOMC has adopted a strategy of gradually tapering the size of asset purchases as the programs approach their end. This is a cautious approach. It should help to smooth out any possible market reaction associated with the flow of purchases, and yet it has no cost under a stock-based view. Tapering gives the market time for new investors or perhaps previously displaced investors to enter the MBS market in the place of Fed purchases. A tapering strategy was applied to our Treasury purchases with success, as the end of that program did not prompt any notable market response—exactly as we had hoped.
However, tapering may be a more important consideration for the termination of the MBS program, given its larger relative size.
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The liquidity facilities were established in response to considerable market strains that had caused the price of term liquidity to skyrocket. In responding, the Fed could be confident that it was pushing market rates toward levels that would be considered normal over the intermediate term. LSAPs, in contrast, could in practice push risk premiums below the levels that would be sustainable over the medium term. Doing so could still be an optimal approach, in terms of achieving macroeconomic outcomes, even if it requires that market pricing will eventually have to reverse.
That reversal would be relatively slow under the portfolio balance theory, if the Fed were to allow its asset holdings to passively run off as they mature.
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As normal market issuance patterns proceed and as the assets purchased by the Fed mature, the market portfolio will gradually revert back to where it would have otherwise been, allowing risk premiums to gradually renormalize. The other challenge that the programs pose is that they have injected large amounts of reserves into the banking system in a persistent manner. Thus, the final question I consider is how policymakers will manage to tighten financial conditions, when deemed appropriate, with the expanded balance sheet. The balance sheet is still growing and, absent asset sales, will remain unusually large for years.
Based on this consideration, it is not surprising that the Federal Reserve has been dedicating extensive effort to developing the framework and tools that could be used to tighten monetary policy even with a large balance sheet.
This is a topic that is frequently discussed by FOMC members in their public speeches and in other communications. A key part of the framework is the ability to pay interest on excess reserves. This authority alone may allow the FOMC to control short-term interest rates to its satisfaction, even if the banking system is saturated with a large amount of excess reserves. Indeed, the interest rate on excess reserves should act as a magnet for other short-term interest rates, keeping them relatively close together.
In the current environment, the federal funds rate has remained modestly below the rate paid on reserves, typically by 10 to 15 basis points. If that spread were to remain steady near those levels even as the interest rate on excess reserves was increased, then policymakers would have sufficient control over short-term interest rates without the use of additional instruments. They could still choose a target level of the federal funds rate and could hit it by adjusting the interest rate on excess reserves. However, policymakers face some uncertainty about how stable that spread will remain as short-term interest rates increase.
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The behavior of the spread today might not be that informative in this regard, as the proximity of short-term interest rates to the zero bound prevents the spread from getting much larger. In my view, the most likely outcome is that the spread will not widen substantially as short-term interest rates increase. However, if the spread does become large and variable, then policymakers will need other tools for strengthening their control of short-term interest rates. With that in mind, monetary policymakers have asked the Federal Reserve staff to develop the ability to offer term deposits to depository institutions and to conduct reverse repos with other firms.
These tools are similar in nature, as they both absorb excess reserves by replacing them with a term investment at the Fed.
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By removing reserves that would have otherwise been available for overnight lending, these tools could pull the federal funds rate and other short-term interest rates up toward the interest rate on excess reserves, providing the Fed with more effective control over the policy rate. The development of both of these tools has made considerable progress.
As indicated in the recent statement from the New York Fed, the Open Market Desk will soon begin conducting a series of small-scale, real-value term reverse repo transactions as part of our efforts to ensure the readiness of this tool. With the successful completion of those transactions, we will have achieved the operational ability to do term reverse repos with primary dealers against Treasury and agency debt collateral, using the triparty system for settlement.
In addition, we continue to work on our ability to use MBS collateral in these operations and on a potential expansion of the set of our counterparties.
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