01959cas a2200241 a 4500 AALejournalIMF005824 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451872675 1018-5941 BD-DhAAL BD-DhAAL Stella, Peter. The Federal Reserve System Balance Sheet : What Happened and Why it Matters / Peter Stella. Washington, D.C. : International Monetary Fund, 2009. 1 online resource (60 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students The recent expansion of the balance sheet of the consolidated Federal Reserve Banks (FRB) is analyzed in an historical context. The analysis reveals that the nature of Fed involvement in U.S. financial markets has changed dramatically and its expansion is several orders of magnitude beyond what is usually reported. The associated fiscal risks and potential exit strategies are then considered. Although risks are considerable in certain unlikely scenarios, FRB capital, earnings capacity, and reserves are more than ample to preserve their financial independence. Nevertheless, the occurrence of losses or a significant drop in FRB profit might lead to an eventual curtailment of Fed operational independence. The paper concludes by considering options to enhance FRB risk management and to assign responsibilities for monetary, financial stability and fiscal policies once the current crisis is overcome. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2009/120 Full text available on IMF http://elibrary.imf.org/view/journals/001/2009/120/001.2009.issue-120-en.xml IMF e-Library