Fed’s Bullard Says Financial Stability Council Faces Challenges
The Financial Stability Oversight Council created by legislation this year to identify systemic risks faces “significant challenges,” such as taking the right policy actions while the economy is relatively good, said Federal Reserve Bank of St. Louis President James Bullard.
“Can the interagency council come to an agreement on a specific risk and an associated policy action when times are good?” the regional bank chief said in the text of a speech today in St. Louis. In addition, “it is also possible to overreact, shutting down a particular financial market practice which in reality does not pose a systemic risk.”
The council, which includes the Fed, was created by the financial overhaul legislation signed into law by President Barack Obama in July. Bullard, who votes on the Federal Open Market Committee this year, didn’t comment on monetary policy in his remarks.
“There is no question that, despite the passage of the legislation, regulatory reform is still far from complete,” he said. “Because the devil is in the details, economic decisions are being affected by the uncertainty surrounding the rule- writing process.”
Bullard, 49, joined the St. Louis Fed’s research department in 1990 and became president of the bank in 2008. He spoke during a conference at the bank today
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