WASHINGTON–While the attention given the meeting of the Federal Reserve’s Federal Open Market Committee (FOMC) this week primarily focused on rates, Chairman Jay Powell also spoke to the systems the Fed has put in place since the financial crisis of a decade ago that are aimed at providing greater stability.
During a press conference following the Fed announcement that the FOMC moved to increase rates, Powell addressed higher capital requirements for financial institutions, stress tests, liquidity requirements and a resolution process that are now in place.
“Nobody’s overconfident we have solved every problem,” Powell said, adding the lessons of the financial meltdown and the recession that followed remain top of mind with him. “A risk now is to forget the things that we learned.”
While there have been efforts to dial back the powers given to the Fed and other regulators in the years after the crisis, Powell said he strongly opposes any watering down of the Fed’s authorities.
Powell said he believes the American financial system is much stronger now than it was, saying, “I’m in the camp that sees much fewer vulnerabilities right now.”