Therefore, many issues are currently under consideration at the national and international levels with the objective of putting in place coordinated, focused, and consistent long-term policies to build the foundations of a more resilient global financial system. I would like to concentrate on two dimensions which are very relevant from a central bank’s perspective, namely liquidity supervision and macro-prudential supervision.
Our lending to support the takeover of Bear Stearns and to provide liquidity to primary dealers, for example, has taken the Federal Reserve well beyond its traditional approach of injecting discount window funds through the commercial banking system. This new financial framework, consequently, leaves us with several distinct choices.