Williams reiterates his main finding that uncertainty increases optimal reserves without a lending facility.
“First, absent a lending facility, the optimal supply of reserves under uncertainty is greater than it would be absent uncertainty.”
Williams states optimal reserve supply under uncertainty is unequivocally higher than without uncertainty when no lending facility exists.
“Absent a lending facility, the optimal supply of reserves under uncertainty is unequivocally higher than it is without uncertainty.”
Williams says high uncertainty can make abundant reserves optimal even when target spread suggests ample reserves region.
“Indeed, if the uncertainty is great enough, the optimal level of reserves can exceed the cutoff for abundant reserves under no uncertainty.”