Lael Brainard: Cross-border spillovers of balance sheet normalization

Speech by Ms Lael Brainard, Member of the Board of Governors of the Federal Reserve System, at "Normalizing Central Banks' Balance Sheets: What Is the New Normal?", a conference sponsored by Columbia University's School of International and Public Affairs and the Federal Reserve Bank of New York, New York City, 11 July 2017.

The views expressed in this speech are those of the speaker and not the view of the BIS.

I am grateful to John Ammer, Bastian von Beschwitz, Christopher Erceg, Matteo Iacoviello, and John Roberts for their assistance in preparing this text. The remarks represent my own views, which do not necessarily represent those of the Federal Reserve Board or the Federal Open Market Committee.

When the central banks in many advanced economies embarked on unconventional monetary policy, it raised concerns that there might be differences in the cross-border transmission of unconventional relative to conventional monetary policy. These concerns were sufficient to warrant a special Group of Seven (G-7) statement in 2013 establishing ground rules to address possible exchange rate effects of the changing composition of monetary policy.