##c maintains its current strategy of not reinvesting those proceeds. in addition, about $ 140 billion of treasury securities mature between now and the end of 2011, giving the fomc scope to reduce its asset holdings even further if it chooses to not replace some of those maturing securities. while the passive strategy of relying on redemptions may be appropriate for now, it might not be sufficient over the longer - term. one problem is that relying only on redemptions would still leave some mbs holdings on our balance sheet for several decades. as indicated in the minutes from the january meeting, the fomc intends to return to a treasuries - only portfolio over time. this consideration could motivate the fomc to sell its agency debt and mortgagebacked securities at some point, once the economic recovery has progressed sufficiently. draining tools : control of short - term rates under the strategies just described, the fed ’ s asset holdings are likely to still be elevated at the time that the fomc wants to raise short - term interest rates. that creates a challenge for controlling those rates, because of the large amounts of reserves that were created from the fed ’ s purchases of those assets. it is therefore important for the fed to determine the way in which it will raise short - term interest rates in an environment with so much liquidity – a topic that i will now cover. the primary vehicle for making adjustments to short - term interest rates in that environment is the ability to pay interest on reserves. we would expect changes in the interest rate on reserves to have a significant influence on other short - term interest rates. however, in order to ensure our ability to influence those other short - term interest rates, we have been developing two tools that can be used to reduce the large amount of excess reserves in the banking system – term deposits with banks and reverse repurchase agreements ( reverse repos ) with a broader universe of financial institutions. let me first provide an update on the progress we have made in developing these tools. on term deposits, the federal reserve has received public comments on the proposed structure of the facility that was published in december, and we are working toward its final form. as described in the recent monetary policy report, the federal reserve expects to be able to conduct test transactions in the spring and to have the facility fully ready, shortly thereafter, to conduct transactions when needed. on reverse repos, we have already successfully run small - scale operations using treasury and agency debt

but also operational risk, credit risk, regulatory risk, reputational risk, you name it — libor has it all. so the possibility of a failed libor transition is something that should keep all of us up at night. but let ’ s try and stay positive in these rather dark times — let ’ s talk about what progress has been made, and what you can do now to minimize the uncertainties that remain. my remarks will focus on the transition in the united states for u. s. dollar libor, but i will touch on some international developments that are relevant to that transition. libor : the end of an error some people have asked whether the end of libor will be pushed out somehow to allow more time for transition. some people, i suspect, may even hope that this ends up being the case. after all, the task is daunting. but i would remind folks that the adage is not “ why do today what can be put off https : / / www. newyorkfed. org / newsevents / speeches / 2020 / hel200929 1 / 6 30 / 09 / 2020 the libor countdown has not stopped - federal reserve bank of new york until tomorrow? ” quite the opposite. indeed, the uk ’ s financial conduct authority ( fca ) has reiterated that the pandemic has not altered the central assumption that firms cannot rely on libor being published after the end of 2021. 3 in fact, the fca has said that even though libor will continue until then, announcements about its end could come as early as this november or december. 4 the financial stability board ( fsb ) — which is chaired by randy quarles, the federal reserve board ’ s vice chair for supervision — has also emphasized that the pandemic should not prevent firms from removing any remaining dependencies on libor by the end of 2021. 5 the alternative reference rates committee ( arrc ), which is the private - sector committee convened by the federal reserve to facilitate the transition away from u. s. dollar libor, has recommended that floating - rate notes, syndicated loans, consumer loans, and securitizations should already include definitive fallbacks to cope with the end of libor, and has set target dates by which no new libor - based products should be issued. 6 the arrc also has provided a timeline and resources to ensure that vendors and operational systems are ready for the switch to alternative rates