Similar efforts toward shared objectives among individual central banks should also improve protection against systemic risk on an international level. Endeavors to synchronize individual countries’ regulatory systems are far more than a technical exercise. Differences are more cultural than economic. They largely reflect differing conventions of business behavior, especially attitudes toward competition. *** Competition, of course, is the facilitator of innovation.
Payment of interest on these balances is our principal tool for keeping the federal funds rate in the FOMC’s target range. This tool has made it possible for us to gradually return interest rates to a more normal level without disrupting financial markets and the economy.