dates. there have also been changes to the business models of many money market participants. following the financial crisis, many financial institutions have sought to adjust their balance sheets to enhance their liquidity positions and reduce reliance on short - term wholesale funding. cash lender business models have also adapted, with changes to some lenders ’ willingness to take credit risk. for example, fannie mae and freddie mac have not been active lenders in the fed funds market since 2011. although the currently elevated level of reserves creates unique temporary dynamics, the introduction of ioer, ( which would have been implemented regardless of monetary policy responses to the financial crisis ) represents a permanent change in the federal reserve ’ s operating framework. drawing on public filings of market participants, we estimate that this figure captures approximately 80 percent of all overnight fed funds transactions. for foreign banks — the predominant borrowers of fed funds — the basel iii leverage ratios are largely calculated on a period - end basis. in contrast, the u. s. version of the ratio uses daily averaging. bis central bankers ’ speeches recent sec money market fund reforms are beginning to change the landscape of the u. s. money fund industry and will likely influence investor use of prime funds relative to government funds or other investment options. money fund reforms are one of many factors expected to increase demand for high - quality, short - term assets – a trend that will have implications for the relative pricing across different money market instruments and flows to different investment options, including fed rrps. we are also attentive to changes in money market infrastructure and technology. for example, the tri - party repo market has undergone significant changes in its settlement process and infrastructure since the crisis. recent changes to the timing of settlement and maturity of tri - party repo trades have implications for market participants, such as making triparty repo investments unattractive for lenders requiring morning return of funds. all these factors contribute to changing dynamics in money markets, with some potentially resulting in greater demand for federal reserve liabilities. new data collection on money markets in addition to developing new tools and approaches to operate in this environment, the fed is also improving tools that support daily implementation of monetary policy and analysis of money market conditions. in april of last year, the fed launched the fr 2420 report on selected money market rates, a mandatory daily collection of fed funds, eurodollar, and cd transactions from around fifty domestic banks and one hundred u. s. branches of foreign banks. 24 the

jerome h powell : remarks on “ government debt management at the zero lower bound ” speech by mr jerome h powell, member of the board of governors of the federal reserve system, at the panel discussion on “ debt management in an era of quantitative easing : what should the treasury and the fed do? ”, washington, dc, 30 september 2014. * * * the views offered are mine alone and not necessarily those of my colleagues at the federal reserve. watch live at : http : / / www. brookings. edu / events / 2014 / 09 / 30 - debt - management - quantitativeeasing - treasury - fed thank you for the opportunity to be here today. given my role at the federal reserve, i am not in a position to comment on debt management policy. i would like to begin by complimenting the authors of this highly interesting paper for their systematic approach to thinking about a wide - ranging and difficult set of issues. after a period during which the treasury ’ s debt management needs dominated federal reserve policies, the fed began to regain its independence with the treasury - fed accord of 1951. since the 1970s, there has been little or no coordination between the two institutions over debt management. this paper argues that the extraordinary response to the global financial crisis brought about a conflict between debt management and monetary policy that should have been avoided through collaboration. the paper proposes a regime in which the treasury and the fed would cooperate around debt management at all times and would fully collaborate in the case in which the monetary policy rate is pinned at the zero lower bound. as a policymaker, i bring a degree of scepticism to a proposal to make major changes to institutional arrangements that seem to me to have served the public well. i will mention three areas where i have significant concerns. first, the literature on financial stability and monetary policy is still in its infancy. there is no consensus that monetary policy ( or debt management policy ) should assume the kinds of roles assigned by the authors. in particular, policymakers are addressing the problem of private money creation through an array of regulatory initiatives. second, in describing the costs of the existing arrangements, the paper estimates that the treasury ’ s post - 2008 extension of the weighted average maturity ( or duration ) of the federal debt offset – in a purely mechanical sense – about 35 percent of the effect of the federal reserve ’ s large - scale asset purchase ( lsap ) programs on the level of 10 - year treasury yields. 1 i would challenge this ex