The financial reform legislation took an important step in this direction by creating a resolution regime under which large, complex financial firms can be placed in receivership, but which also gives the government the flexibility to take the actions needed to safeguard systemic stability.
The important – but partial – perspective that it provides does not embody, or (worse) pre-empt, the exercise of judgement which solely resides in the Council. In the discussions leading to its policy decisions the Council reconciles the analyses conducted under the two complementary pillars underlying our monetary policy strategy.