continue. the eventual level of demand for reserves is less certain but is highly likely to exceed pre - crisis levels when reserve balances averaged only about $ 15 billion. reserves are the ultimate “ safe asset, ” and demand for safe assets has increased substantially over time because of long - run trends, including regulatory requirements. other liabilities for a more detailed discussion of the longer - run framework, see lorie k. logan ( 2017 ), “ implementing monetary policy : perspective from the open market trading desk, ” speech delivered at the money marketeers of new york university, new york, may 18, https : / / www. newyorkfed. org / newsevents / speeches / 2017 / log170518. - 11 include the treasury general account, the foreign repurchase agreement ( or repo ) pool, balances held at the fed by designated financial market utilities, and other items. to gain a sense of the possible long - run size of the balance sheet, the next slide shows simulations under three different assumptions for the ultimate level of reserve balances : $ 100 billion, $ 600 billion, and $ 1 trillion ( figure 10 ). 22 these simulations show that, due to the growth of currency and other liabilities, the balance sheet will remain considerably above its pre - crisis levels even if reserves were to fall back to $ 100 billion ( the black line ). at its current growth rate, currency in circulation would reach $ 2 trillion by 2022 and $ 2. 8 trillion in 2027. even in the low case in which reserves decline to $ 100 billion, our balance sheet would be about $ 2. 4 trillion in 2022 and would grow from there in line with currency demand. if the long - run level of reserves is $ 600 billion in 2022, then the balance sheet would be about $ 2. 9 trillion. 23 the appropriate long - run level of reserves will also depend on the operating framework the committee chooses. before the crisis, reserves were scarce, and the committee used open market operations to control the federal funds rate by managing the intermediate figure of $ 600 billion is based on the federal reserve bank of new york ’ s may 2017 surveys of primary dealers and market participants. following the 2017 study by ferris, kim, and schlusche, the federal funds rate path used in the balance sheet simulations consists of the modal path given in the fomc participants ’ summary of economic projections ( sep ) ; see erin e.

rather than a substitute, of standard interest rate decisions : they help ensure that standard policy produces its intended effects, rather than aiming to impart additional relaxation to the overall monetary policy stance. this feature distinguishes the non - standard monetary policy measures the ecb used so far from quantitative easing policies as pursued by other major central banks, because quantitative easing is designed as a substitute for standard interest rate policy when central bank rates have reached levels close to their zero lower bound and cannot be lowered further. this feature also illustrates that the introduction of non - standard measures does not imply the need for the ecb to manage a trade - off between short run inflation volatility and price stability in the longer run. the non - standard monetary policy measures that we have see article 127 ( 5 ) tfeu. see, for example, thornton, h. ( 1802 ), an enquiry into the nature and effects of paper credit of great britain, bordo, m. d. ( 1990 ), the lender of last resort : alternative views and historical experience, federal reserve bank of richmond economic review, january / february, or freixas, x., c. giannini, g. hoggarth and f. soussa ( 2002 ), lender of last resort : a review of the literature, in goodhart, c. a. e., and g. illing ( eds. ), financial contagion, crises and the lender of last resort – a reader, oxford university press. bis central bankers ’ speeches used so far are rather the means to ensure that standard ecb decisions can be effective at all horizons. there should therefore be no concern that our non - standard measures may produce spillovers on the ecb ’ s ability to maintain price stability. thanks to the possibility to separate standard and non - standard monetary policy actions, our non - standard measures do not restrict in any way our capacity to tighten the monetary policy stance when necessary. this has been clearly demonstrated by the governing council ’ s repeated decisions to change interest rates over the course of this year, while maintaining its non - standard monetary policy measures. in turn, our non - standard measures are temporary in both their nature and scope. once the impairments to the transmission process disappear they can be phased out, whereas the standard interest rate policy remains. in fact, many of our non - standard monetary policy measures phase out automatically, for example long - term refinancing operations at fixed