- Expanding Fed Balance Sheet Would Require 'Strict Scrutiny' - Eventual Asset Sales Need Not Mean Higher Fed Funds Rate - 'Differentiate' Funds Rate, Balance Sheet Moves

By Steven K. Beckner

(MNI) - Federal Reserve Governor Kevin Warsh warned Monday that if financial conditions continue to be volatile and "less supportive" of growth, the economy could suffer and said the recovery would benefit if volatility lessens.

- Expanding Fed Balance Sheet Would Require 'Strict Scrutiny' - Eventual Asset Sales Need Not Mean Higher Fed Funds Rate - 'Differentiate' Funds Rate, Balance Sheet Moves

By Steven K. Beckner

(MNI) - Federal Reserve Governor Kevin Warsh suggested Monday that, if anything, the Fed should consider shrinking its balance sheet at some point, though not now.

"Indeed, the Federal Reserve should continue to give careful consideration to the appropriate size and composition of its existing holdings," he said.

WASHINGTON (MNI) - The following are the remarks of Federal Reserve Gov. Kevin Warsh prepared Monday for the Atlanta Rotary Club:

It's Greek to Me

It is tempting to view the economic events of the last three years as a series of unrelated, unpredictable, unfortunate financial shocks.1 And it is easy -- too easy, really -- to bemoan the latest flare-up of crisis conditions, and chalk it up to the global economy's continued string of bad luck.

By Isobel Kennedy

NEW YORK (MNI) - The New York Federal Reserve announced Monday that it would begin conducting coupon swaps on 30-year Fannie Mae "to-be-announced" passthrough securities with a 5.50% coupon in order to facilitate settlements with the primary dealers.

The swaps are likely to begin Tuesday. They will be restricted to the 5.50% coupon and the amount is not to exceed $9.2 billion.

By John Shaw

BRUSSELS (MNI) - In a meeting of OPEC and EU officials Monday, participants concluded that, in order to minimize the risk of facing excessive market volatility, adequate regulatory reforms, including greater transparency, need to be part of an overall reshaping of the global financial sector.

In a joint statement at the end of the seventh ministerial-level meeting of the Energy Dialogue between the EU and OPEC in Brussels, both groups also reiterated their mutual interest in stable, transparent, and predictable oil markets.

NEW YORK (MNI) - The following is the text of a statement by the New York Federal Reserve Bank Monday, announcing its plans to begin conducting what it describes as "a limited amount" of agency MBS swaps to facilitate a timely settlement of Federal Reserve's MBS purchases:

This week, the Federal Reserve Bank of New York Open Market Trading Desk (the "Desk") will begin conducting a limited amount of agency mortgage-backed security (MBS) coupon swap operations in order to facilitate the timely settlement of the Federal Reserve's agency MBS purchases.