The Federal Reserve is working to make the U.S. financial system stronger and more resilient, Federal Reserve Board chairman Ben S. Bernanke said yesterday.
“The financial turmoil since August underscores the need to find ways to make the financial system more resilient and stable,” he said at a Federal Deposit Insurance Corp. forum.
Some things Bernanke suggested include “improving the regulation and supervision of financial institutions, strengthening the financial infrastructure, and the possible development of a new resolution process for securities firms.”
Beyond those recommendations, Bernanke said, Congress must determine whether it will enact broader reforms. “Making that determination will raise a host of complex and challenging issues, but the stakes are commensurately high,” he said.
While “it is unrealistic” to expect the elimination of financial crises, “especially while maintaining a dynamic and innovative financial system,” Bernanke noted, ”financial instability can have serious economic costs.”