These steps should help the public understand the considerable efforts we have taken to minimize the risk of loss as we provide liquidity to the financial system in our role as lender of last resort. Altogether, we now provide a higher degree of transparency than at any other time in the history of the Federal Reserve System.
However, it was gradually recognized that the circumference of compliance functions in banks needed to be not only enlarged, but also clearly defined, especially in a scenario where successive Annual Financial Inspection Reports prepared by the banking supervisor highlighted a host of compliance deficiencies.