Higher interest rates would not only serve to discourage the outflow of capital, but would also reduce the domestic demand for bank credit. The market trend for interest rates to rise could not be resisted. Monetary policy was therefore directed towards a reinforcement of and active support for a market adjustment process that would eventually restore equilibrium to the balance of payments.
The Federal Reserve and the FDIC are working together with counterparts from other countries to identify opportunities for more limited cooperation agreements, coordinated supervisory work on resolution plans, and other devices to make the orderly resolution of a large, internationally active firm more feasible. OTC derivatives regulatory reforms Another key part of the Dodd-Frank Act that involves significant international considerations is OTC derivatives reform.