The potential effects of an individual bank’s behavior on the financial system as a whole – much less that of a bank holding company or unregulated financial firm – were generally not addressed in prudential regulatory laws and only unevenly considered in supervisory practice. Of course, the picture was not quite so monolithic as I have just portrayed it.
But it is equally important that we get out across the country and listen to people. These two-way conversations help fill in the gaps that economic statistics leave behind. We organize this effort around our Business Outlook Survey, which is based on conversations between our regional representatives and business leaders. Members of Governing Council also engage in these conversations.