*  *  *  In my remarks today I would like to address the issue of financial instability from two perspectives: First, I will offer a conceptual framework that helps us understand why periods of financial instability arise, and second, I will describe how the Federal Reserve has used the provision of liquidity to reduce the damage to the economy during such periods of turmoil.
Our aim is to make sure you don't amplify normal market oscillations, either by regulation or by individual behavior. That's the ideal regulatory action plan. 2  BIS Review 11/2009