The financial accounting rules for balance sheet netting for repo transactions are spelled out in Financial Accounting Standards Board (FASB) Interpretation No. 41, “ Offsetting of Amounts Related to Certain Repurchase and Reverse Repurchase Agreements” (FIN 41). For other derivatives contracts, FASB Interpretation No. 39, “Offsetting of Amounts Related to Certain Contracts” (FIN 39) states the relevant requirements. 23 I discussed the foreign repo pool in my 2016 remarks. See Potter, “Money Markets after Liftoff: Assessment to  Date and the Road Ahead,” February 22, 2016. It is also discussed in the annual report. 24 See “The Recent Increase in the Effective Fed Funds and Overnight Bank Funding Rates,” Wrightson ICAP,  October 17, 2016. 25 See “Factors Affecting Reserve Balances,” March 10, 2016 and January 5, 2017. 26 Duffie and Krishnamurthy, “Passthrough Efficiency in the Fed’s New Monetary Policy Setting,” 2016. 27 In constructing this time series, Darrell and Arvind combine two things: before mid-2009, they use a now-  discontinued secondary market rate for tradable certificates of deposit. This is a wholesale market rate, and during normal times it generally tracked the federal funds rate. However, after mid-2009, they use a primary market deposit rate (i.e., rates offered in bank branches to customers) that did not rise after the December 2015 tightening. This low responsiveness of primary market rates to tightening of monetary policy is consistent with similar behavior during previous tightening cycles, as documented by Driscoll and Judson, “Sticky Deposit Rates,” October 1, 2013. The OECD’s dataset includes a 90-day interest rate series.

As stated in a recent Bank for International Settlements report, “Financial regulation aims to influence the behavior of banks and other financial intermediaries to enhance their resilience and support financial stability. Given that those same intermediaries interact with central banks in the context of monetary policy implementation, changes to the regulatory environment are bound to have effects that central banks will need to take into account.”38 Economic and financial stability are closely interconnected; for example, monetary transmission was reliably effective in 2007, but in 2008 became quite impaired as a result of systemic financial stress. In navigating these issues, my colleagues and I are aided by the integration of policy analysis across disciplines at the Federal Reserve System, an arrangement which provides an ongoing breadth and depth of perspective. Thank you for your attention. 1 I would like to thank James Egelhof and Antoine Martin for their assistance in the preparation of these remarks,  Adam Biesenbach for his assistance with the calculation of the dispersion indices presented here, Logan Suba for his assistance with data, and colleagues in the Federal Reserve System for numerous insightful comments and suggestions. 2 See, for example: Bernanke, “Implementing Monetary Policy,” March 30, 2005; Ihrig, Meade and Weinbach  “Rewriting Monetary Policy 101: What's the Fed's Preferred Post-Crisis Approach to Raising Interest Rates?, ” Journal of Economic Perspectives, Fall 2015. 3 Conceptually, the federal funds rate is a measure of what banks pay to take out unsecured overnight loans from  other banks, government-sponsored entities, and certain other entities.