Source stringclasses 1
value | Date int64 1.98k 2.01k | Text stringlengths 2 27.1k | Token_count int64 1 5.57k |
|---|---|---|---|
fomc | 1,978 | Is that a motion? | 5 |
fomc | 1,978 | That's the proposal by the [sub]committee and I move it. | 14 |
fomc | 1,978 | Would that include the reaffirmation of the other instructions that we've had? We're just changing those [limits]. | 21 |
fomc | 1,978 | The second motion that I'd have to make involves these purchases leading to the repayment of the swaps. That is all in paragraph 1[B] of the procedural instructions and I move that it be amended as proposed here. | 43 |
fomc | 1,978 | Is everybody clear on what you're proposing? Is there a second? | 13 |
fomc | 1,978 | Seconded. | 3 |
fomc | 1,978 | The motion has been seconded. If everyone is clear on what the motion is--I have it before me and I assume everyone else does, too--is there any further discussion? All of those in favor, say "aye." ALL. Aye. | 52 |
fomc | 1,978 | Opposed? So voted. Henry, you have other items to discuss. | 15 |
fomc | 1,978 | Yes, the second topic we dealt with--the repayment or renewal of the maturing swaps--I have no immediate final proposal to make, with one exception which Alan Holmes will talk about subsequently. Essentially there are four options: (1) to repay quickly; (2) to repay with a short rollover of 3 or 4 times for a total 9 t... | 1,006 |
fomc | 1,978 | Mr. Chairman, during the month of April, the System has sixteen maturing swap drawings on the Bundesbank, totaling $584 million, and one drawing on the Swiss National Bank of $18.9 million. Ten of these sixteen German mark drawings and the single Swiss franc drawing are first renewals. And that would create no problem ... | 142 |
fomc | 1,978 | Any discussion, questions? Yes, Phil. | 9 |
fomc | 1,978 | Mr. Chairman, I would second that proposal but only if in the interim period we are seriously negotiating a long-range repayment procedure. I gather that was the intent of the renewal, Alan. So given that clear understanding that we will come out with some sort of repayment program within this time frame, I would be wi... | 68 |
fomc | 1,978 | Mr. Chairman, I should also note that this agreement for a second renewal will in no way impede earlier repayment if the market turns and we are able to acquire marks in the market--in other words, if we're lucky. | 45 |
fomc | 1,978 | You have the right of prepayment. | 8 |
fomc | 1,978 | Yes. | 2 |
fomc | 1,978 | Yes, or if we make an agreement in that interim period for prompt repayment. | 16 |
fomc | 1,978 | That's right. | 3 |
fomc | 1,978 | Any other comments or questions? You've heard the motion, the second. All those in favor say "aye." ALL. Aye. | 27 |
fomc | 1,978 | Opposed? So voted. Alan, I think you have other [comments to make.] | 18 |
fomc | 1,978 | Yes. I think Henry has given a good review of the four options that the ad hoc subcommittee had in mind. While the immediate problem of the swaps maturing over the next few months is solved for the time being, as the ad hoc subcommittee report notes, and as other members of the Committee have noted, the Germans feel a ... | 880 |
fomc | 1,978 | Gentlemen, you've heard the invitation. Any guidance? Paul. | 14 |
fomc | 1,978 | I might just comment very briefly, Mr. Chairman. Among all the options that are before us, none of which will be very happy I think from the standpoint of the Bundesbank, I would guess that the most practical one will be to follow the so-called Swiss model. That's where we would space out [the repayment period] a littl... | 175 |
fomc | 1,978 | Yes, [Henry]. | 5 |
fomc | 1,978 | I share Paul's view that among the various evils if we cannot get a repayment after 12 months [by] drawing on the Bundesbank, which I think would probably be preferable to the Swiss type of arrangement, then certainly the Swiss model is better than a rollover for 2 years or more. The latter would set a precedent with r... | 288 |
fomc | 1,978 | Phil. | 2 |
fomc | 1,978 | Thank you. I think I would agree with what Paul and Henry have been saying--that the worst of the possible alternatives is nothing but continued rollovers for 3 years. I think that leaves us with a very large outstanding financing that I prefer we not take on. I would hope, though, that if we're going into a Swiss type... | 91 |
fomc | 1,978 | Phil. | 2 |
fomc | 1,978 | It's my belief that we would be wise to sacrifice any other repayment terms for retention of the loss-sharing because if that is reversed, the consequences are an immediate doubling of our exposure. It strikes me that, with the level of exposure that we have now and may end up having to continue to carry, anything that... | 97 |
fomc | 1,978 | Governor, the only thing I'd say is that we also have a profit exposure and as you recall in '75 we were way in the hole on a billion dollars worth of German marks and came out of the [situation] with a profit. So, I remain a little optimistic. | 57 |
fomc | 1,978 | Dave. | 2 |
fomc | 1,978 | Just a request of Alan. In your paper, Alan, I would personally find it helpful if you would go back a little bit and review the basic principles and the experience in other currencies. That would serve as a background for us. | 47 |
fomc | 1,978 | I agree that the 50-50 sharing [of losses] is quite important, because you can't tell which way it's going to go. They've been with us all the way to this point; they ought to continue with us as this is liquidated. They may well gain, as you say, as a result of it, rather than lose. I also agree with Phil Coldwell. I ... | 168 |
fomc | 1,978 | Yes, Mr. Chairman, I have another recommendation. At the last meeting of the full Committee, the Committee increased the authorization for our open position in foreign currencies to $2 billion. We now have a leeway of about $171 million under that open position. Under the procedural instructions, an increase of up to $... | 128 |
fomc | 1,978 | Any discussion? Phil. | 5 |
fomc | 1,978 | Mr. Chairman, I'm looking down the pike at this and I want to come back to the question that you asked us to defer until the Manager reached this position and that is the question of what do we do with the fact that the Treasury has only $50 million available. | 56 |
fomc | 1,978 | That's my next point. | 5 |
fomc | 1,978 | Forgive me, Mr. Chairman, but I think it becomes an important point here. If we're going to authorize an additional $425 million--or whatever the figure comes out to be--for a net open position and the Treasury only has $50 million, we could be in a position where we are expending sizable amounts and have continued exp... | 74 |
fomc | 1,978 | Without sharing it. | 4 |
fomc | 1,978 | Without sharing it. | 4 |
fomc | 1,978 | Mr. Chairman, the Treasury does have only $50 million left under its $1 [billion] swap line with the Bundesbank. But it has agreed, as we all know, to sell the equivalent of $740 million of SDRs to the Bundesbank. The Treasury would prefer to wait until the final ratification of the pending amendment to the IMF rules s... | 272 |
fomc | 1,978 | A period of a few days doesn't bother me; months would [bother me]. | 17 |
fomc | 1,978 | I would say an absolute maximum of one week. The time may run out. | 16 |
fomc | 1,978 | There are several things you should know. The Treasury proposed originally that we intervene for a period, [doing] 100 percent and then they would intervene for a period using the 60-40 [ratio]. And when they had used up 80 percent of the amount we'd done, we would come back in again. I think that's a very poor procedu... | 131 |
fomc | 1,978 | My hesitancy on this, Mr. Chairman, is that I know how some of these things get deferred and delayed. I am concerned that the Treasury might end up actually not selling these SDRs. If I recall [the reference to selling SDRs] that was in the press release, that says "if necessary" or "if desirable" or something like tha... | 75 |
fomc | 1,978 | Governor Coldwell, you've been in Washington too long; you're becoming cynical. You need some R&R. Obviously, we can count on the Secretary of the Treasury when he tells us he's going to do this. Can't we? | 45 |
fomc | 1,978 | You added "can't we." | 6 |
fomc | 1,978 | Would this agreement be written down as we understand it? Will we have an exchange of letters or what will it be? | 24 |
fomc | 1,978 | We can certainly confirm by letter what we've already agreed to verbally. | 13 |
fomc | 1,978 | You can lose the Secretary of the Treasury overnight. | 10 |
fomc | 1,978 | Yes. | 2 |
fomc | 1,978 | If we do this, I'd like it understood that when they reimburse us they reimburse us in marks so that any exchange rate fluctuations in the meantime are not against us but against them. | 36 |
fomc | 1,978 | Oh yes, that should be for their account, really. We shouldn't be taking the risk even for three days. They should just bear it with us all along. | 33 |
fomc | 1,978 | I have a suspicion that the Treasury will probably prefer to go ahead and sell SDRs without the amendment rather than get into this reimbursing problem. But I really don't know that. | 36 |
fomc | 1,978 | Henry, would you just confirm it? Tony has understood this clearly and I think we just want to make sure there's no lapse here. | 27 |
fomc | 1,978 | Whether we like it [or not], an exchange of letters is a very laborious affair with the Treasury. | 22 |
fomc | 1,978 | Well, just send them a letter confirming it and [add] a place for them to [sign it and ask them to] send back a copy. Ernie. | 34 |
fomc | 1,978 | Where and for what purpose do we shift from 50-50 in our dealings with the Treasury to 60-40? | 25 |
fomc | 1,978 | Their resources are shrinking in relation to ours. Therefore, when the original billion dollars runs out, [and they have] $50 million more--is that right, Alan? | 35 |
fomc | 1,978 | Roughly. | 4 |
fomc | 1,978 | At that point we would shift to 60 percent for the Federal Reserve and 40 percent for the Treasury because we have larger resources. | 27 |
fomc | 1,978 | For the purpose of-- | 5 |
fomc | 1,978 | Sharing. Remember, our swap line is 50-50 risk-sharing with the Bundesbank so all the intervention has been under an arrangement where we take 50 percent and the Treasury takes 50 percent. So we've had 25 percent of the risk. Now that will shift to where we will have 30 percent of the risk. | 67 |
fomc | 1,978 | I might say that this leaves open what is going to happen down the road. If we go 60-40, then the Treasury will run out of their SDRs before we run out of our $2 billion. Of course, we hope that we're not going to go to the limit for either of them. But if that were to happen, then the Treasury has to look for addition... | 80 |
fomc | 1,978 | To the IMF. | 4 |
fomc | 1,978 | The IMF, for instance. Or we have to change the ratio. I would much prefer the former, but we should not be there naked and alone; we should have the Treasury with us whenever it happens. | 42 |
fomc | 1,978 | I certainly want to second that, Mr. Chairman. | 11 |
fomc | 1,978 | I certainly agree. | 4 |
fomc | 1,978 | I think there is real public exposure here because we're using public money without a Congressional authorization. Just as the Treasury indicated that they were concerned about that-- | 30 |
fomc | 1,978 | I think we all agree on that and if we come to the point where they have no resources, I guess we'll have to face the issue of whether we end the intervention. | 35 |
fomc | 1,978 | Well, as you say, they can borrow from the IMF. | 13 |
fomc | 1,978 | They made a point in the communique that they have the resources of the IMF, and I think that means they should have a commitment to use them. Any further discussion? Yes, Bob. | 39 |
fomc | 1,978 | Maybe just a gratuitous comment: The Treasury is rather concerned about possible losses and I would say that we as a central bank are subject to more criticism in terms of the amount of losses than they are because constitutionally the Administration has more responsibility in the foreign area than we do. [Unintelligib... | 62 |
fomc | 1,978 | That's why we want to continue to pursue some take-out from the Treasury. | 15 |
fomc | 1,978 | In a sense, of course, our losses fall on the Treasury. | 14 |
fomc | 1,978 | But our critics will not mention that at the time [they occur]. | 14 |
fomc | 1,978 | They're on our books. | 5 |
fomc | 1,978 | I think there's something to that politically, Mr. Chairman, but the fact is that the Treasury has a very limited capacity mechanically to take losses with-- | 30 |
fomc | 1,978 | But without Congressional authorization. | 5 |
fomc | 1,978 | The question before the house is Alan's suggestion--I don't believe we acted on it--on the $2-1/4 billion. Is that correct? | 32 |
fomc | 1,978 | Right. | 2 |
fomc | 1,978 | Is there any dissent from that change? Hearing none, we will approve that. Henry, I think you have one final item? | 26 |
fomc | 1,978 | I have a final item from the ad hoc subcommittee report, which deals with the scale of intervention. As you know, after the Treasury came in, [our] intervention was more forceful and of a technically different type also--that is, going in part to the banks directly with bids or offers. The question is how long we shoul... | 496 |
fomc | 1,978 | Bones. | 2 |
fomc | 1,978 | Mr. Chairman, it seems to me that maybe that's an extreme effort--trying to decide the extent of disorder and the [scale of operations needed to counter] the disorder. The final statement suggests that there's going to be close consultation at all times. I guess I find some difficulty in trying to distinguish [the degr... | 100 |
fomc | 1,978 | Well, I would hope that eventually we can get to definitions of types of disorders. You seem to imply the types of disorder are limitless. There can be wider spreads, jumpier rates, fewer participants in the market, more rapid movement in the rates-- | 51 |
fomc | 1,978 | That's exactly what I am talking about. | 8 |
fomc | 1,978 | Nevertheless, it ought to be possible to describe the market in those terms because essentially the Manager has to make up his mind whether that is one of the conditions of the market and whether he wants to operate. So, the decision can be made on the spur of the moment or presumably it can be made once the excitement... | 257 |
fomc | 1,978 | Paul. | 2 |
fomc | 1,978 | Just one comment, Mr. Chairman: I do think the emphasis here should be on consultation. I don't disagree with the flavor of what this paragraph is trying to say, but in the end we can only judge these things in specific circumstances. And I think I can say--correct me if I am wrong, Mr. Holmes--that the Desk has never ... | 101 |
fomc | 1,978 | The consultation has been rather complete. | 7 |
fomc | 1,978 | John. | 2 |
fomc | 1,978 | I'd like to ask Henry what [his subcommittee] had in mind in the first sentence of this paragraph on the scale of intervention, where it says "in the absence of more fundamental policy by the United States." Could you give us an illustration of what you had in mind there? | 57 |
fomc | 1,978 | Well, the most cited things would be energy legislation and action on fiscal and monetary policy and, therefore, on inflation. These are the fundamentals. Then there are bridging actions, which aren't very fundamental, but nevertheless go beyond intervention. That would be to sell SDRs, draw on the IMF, sell gold, or m... | 69 |
fomc | 1,978 | Obviously, you can do the latter a lot quicker than the former. | 14 |
fomc | 1,978 | So far. Phil. | 5 |
fomc | 1,978 | Mr. Chairman, I would agree with the thrust of this. I do think, however, that we can easily get led down a primrose path month by month by month to the point where we again are using up in full-scale intervention the nearly $2 billion of additional authority. I would hope that before we move much further down this [ro... | 126 |
fomc | 1,978 | Well, thank you. These comments are very helpful. We've spent one hour and twenty-five minutes of our valuable meeting on a subject that I hope will wither away. But I'm not very hopeful. We'll be discussing it at the next meeting and I hope to be of some [unintelligible]. | 61 |
fomc | 1,978 | On that point, Mr. Chairman, this morning we've been primarily on the German mark problem. Speculators, I've observed, are quick to move in other directions. Are we prepared to use the same techniques in other areas if-- | 46 |
fomc | 1,978 | The main one, of course, is the yen. And I personally am not prepared to suggest that we get involved. The Japanese are extremely upset. It's a very serious political problem with the Japanese. I'd want to send high level people [there] to try to get some similar arrangements. I don't think that we really have the reso... | 190 |
fomc | 1,978 | If I may add a comment: Even though we do now have a strong concern about the value of the dollar and the desirability, if it can be avoided, of keeping it from depreciating--short, of course, of pegging a rate--the yen is a pretty special proposition. The Japanese have such a large surplus and it is projected to conti... | 119 |
Subsets and Splits
No community queries yet
The top public SQL queries from the community will appear here once available.