The Federal Reserve has worked with other U.S. and foreign supervisors to strengthen capital, liquidity, and risk-management requirements for banking organizations. In particular, higher capital requirements for trading activities and securitization exposures have already been agreed. Work continues on improving the quality of capital and counteracting the procyclical tendencies of important areas of financial regulation, such as capital and accounting standards.
I have painted a reasonably sanguine view of the world economy and its ability to meet challenges. I don’t mean to suggest, however, that there aren’t any economic risks in the adjustments that I have outlined. As you all know, we are again facing heightened geopolitical uncertainties. And there are significant global economic imbalances that must be corrected over time.