Federal Reserve Governor Stephen Miran on Thursday said reducing the financial system's demand for high levels of liquidity could allow the ​central bank to substantially cut the size of its still large balance sheet and facilitate an easier stance of monetary policy than would otherwise be the case. “Shrinking the size of the balance sheet is desirable” and those who say it can’t happen “simply lack imagination,” Miran said in the text of a speech to be delivered before the Economic Club of Miami. Miran said easing liquidity regulations, tweaking bank stress tests, together with destigmatizing the usage of Fed ... (full story)