It is a pleasure to have the opportunity to speak here today [April 7, 2017] on the important topic of financial regulatory reform. As always, what I have to say reflects my views and not necessarily those of the Federal Open Market Committee or the Federal Reserve System. [1]
A robust financial system is central to our economic well-being. The financial crisis and the Great Recession wreaked havoc on millions of American households and businesses, and much of this damage was due to a flawed regulatory framework. In particular, many large banks and securities firms had inadequate capital and liquidity buffers, and the financial system had a number of important structural weaknesses that made it vulnerable to stress. In response, legislators and regulators made significant changes to strengthen our regulatory framework. Importantly, as we consider further changes, we must avoid throwing the baby out with the bathwater.