In a 2019 column on bloomberg.com, former Federal Reserve Bank of New York President Bill Dudley noted, “The Fed now expects banks to demand more reserves than previously thought, so its balance sheet will likely be larger—this means more securities in its portfolio.” 

a. What does Dudley mean when he refers to the Fed’s balance sheet? 

b. Why would banks be demanding more reserves in 2019 than they did before the 2007–2009 financial crisis? 

c. What is the connection between banks’ demand for reserves and the securities in the Fed’s portfolio? What type of securities is Dudley referring to?