As those assembled here well know, the  1  See Walter Bagehot ([1873] 1897), Lombard Street: A Description of the Money Market (New York: Charles Scribner’s Sons). BIS central bankers’ speeches  1  deliberations that led to the founding of the Federal Reserve were precipitated by a financial panic, the Panic of 1907.
The preservation of financial stability was consequently a principal goal of the creators of the new central bank. In response to the Panic of 2008, the Federal Reserve has returned to its roots by restoring financial stability as a central objective alongside the traditional goals of monetary policy.