Eight years at the Federal Reserve has only reinforced my belief that strong capital requirements are central to a safe and stable financial system. It is important for the public to understand why this is so, especially at a moment when there is so much talk of changes to financial regulation.
The Post-Crisis Regulatory Response To understand the regulatory changes made in response to the 2007 to 2009 financial crisis, it is useful to recall the circumstances with which regulators and legislators were confronted. First, of course, was the sheer magnitude of the impact on the economy, which suffered its worst recession since the Great Depression.