On September 30 and October 1, 2021, the New York Fed held a digital conference on the implications of the Fed’s actions in response to the COVID-19 pandemic. New York Fed President John Williams gave the opening and concluding remarks.
Market Impression
The primary session was moderated by Susan McLaughlin from the New York Fed’s Markets Group and centered in the marketplace affect of the Fed’s response to the pandemic. Andy Haughwout, David Arseneau, and Or Shachar – all economists within the Federal Reserve System — introduced analysis on the design and affect of the Fed’s interventions. Andy mentioned a paper on the position of the Municipal Liquidity Facility, co-authored with Ben Hyman and Or Shachar, David introduced work on the Main Street Lending Program, co-authored with Jose Fillat, Molly Mahar, Don Morgan, and Skander Van den Heuvel, whereas Or centered on the Primary and Secondary Corporate Credit Facilities, primarily based on a paper co-authored with Nina Boyarchenko, Caren Cox, Richard Crump, Andrew Danzig, Anna Kovner, and Patrick Steiner. The New York Fed additionally launched a collection of Staff Reports devoted to the amenities arrange in response to the pandemic.
Watch the related conference video.
Monetary Fragilities
The second session was on “Monetary Ecosystem Fragilities Revealed by the Pandemic” and moderated by Beverly Hirtle, director of analysis on the New York Fed. First, Marcin Kacperczyk, from Imperial School London, talked in regards to the penalties of worldwide flows for monetary stability. He additionally described analysis exhibiting the advantages of swing pricing for open-ended mutual funds. Subsequent, Arvind Krishnamurthy, from Stanford Graduate College of Enterprise, mentioned the fragility of bond markets and the implications for coverage. Adair Morse, deputy assistant secretary for capital entry on the Division of the Treasury, adopted with an summary of small enterprise finance and challenges to small corporations in the course of the pandemic. Lastly, Stefan Nagel, from the College of Chicago Sales space College of Enterprise, mentioned the dislocations that occurred within the Treasury market in March 2020.
Macroeconomic Impression
The third session, moderated by Andreas Lehnert, director of the Division of Monetary Stability on the Federal Reserve Board, was on the subject of the macroeconomic affect of the interventions initiated in response to the pandemic. Markus Brunnermeier, from Princeton College, gave an summary of the monetary dominance principle of financial coverage. Kinda Hachem, from the College of Virginia Darden College of Enterprise, mentioned differential developments in financial institution steadiness sheets throughout completely different financial institution sizes over the pandemic. Ricardo Reis from the London College of Economics, adopted with a dialogue of the position of central financial institution swap traces and the FIMA repo facility in serving to to assist the U.S. greenback as a world forex.
Classes Realized
Lorie Logan, supervisor of the System Open Market Account (SOMA), moderated the fourth session on classes for the longer term. Isabel Schnabel, government board member of the European Central Financial institution, talked in regards to the challenges confronted by central banks in responding to occasions equivalent to a pandemic. Hyun Tune Shin, from the Financial institution for Worldwide Settlements, mentioned the position of leverage in understanding threats to monetary stability. Viral Acharya, from the New York College Stern College of Enterprise, talked about some steps that central banks might take to restrict the chance posed by excessive occasions (for instance, by limiting leverage within the monetary system and addressing the proliferation of demandable claims). Lastly, Thomas Philippon, from New York College’s Stern College of Enterprise, supplied some classes from the worldwide monetary disaster and the pandemic, together with the significance of debt ensures, how greatest to restructure segments of the financial system most affected by a shock, and the advantages of decentralizing shutdown selections.
Nina Boyarchenko is a analysis officer within the Federal Reserve Financial institution of New York’s Analysis and Statistics Group.
Anna Kovner is the coverage chief for monetary stability within the Financial institution’s Analysis and Statistics Group.
Antoine Martin is a senior vp within the Financial institution’s Analysis and Statistics Group.
How you can cite this submit:
Nina Boyarchenko, Anna Kovner, and Antoine Martin, “On the New York Fed: Implications of Federal Reserve Actions in Response to the COVID-19 Pandemic,” Federal Reserve Financial institution of New York Liberty Avenue Economics, October 15, 2021, https://libertystreeteconomics.newyorkfed.org/2021/10/at-the-new-york-fed-implications-of-federal-reserve-actions-in-response-to-the-covid-19-pandemic.
Disclaimer
The views expressed on this submit are these of the authors and don’t essentially replicate the place of the Federal Reserve Financial institution of New York or the Federal Reserve System. Any errors or omissions are the duty of the authors.
