Asset-based Reserve Requirements : Reasserting Domestic Monetary Control in an Era of Financial Innovation and Instability

@inproceedings{Palley2003AssetbasedRR,
  title={Asset-based Reserve Requirements : Reasserting Domestic Monetary Control in an Era of Financial Innovation and Instability},
  author={Thomas I. Palley},
  year={2003}
}
This paper argues for developing a new system of financial regulation based upon asset-based reserve requirements (ABRRs). Such a system represents a shift in regulatory focus away from the traditional concern with the liability side of financial intermediaries’ balance sheets. ABRRs have both significant macroeconomic and microeconomic advantages. At the macroeconomic level, they can provide policy makers with additional policy instruments. This is particularly useful in light of recent… CONTINUE READING