Further progress is now proceeding or being discussed in three directions: ensuring a level playing field by addressing options and national discretions allowed for by the CRD/CRR; setting up a common public backstop to the new Single Resolution Fund; and establishing a common European Deposit Insurance Scheme.
Because we cannot anticipate what may be needed in the future, the Congress should preserve the ability of the Fed to respond flexibly and nimbly to future emergencies. Further restricting or eliminating the Fed’s emergency lending authority will not prevent future crises, but it will hinder the Fed’s ability to limit the harm from those crises for families and businesses.