“Reflections on the TALF and the Federal Reserve’s Role as Liquidity Provider”. Remarks at the New York Association for Business Economists, June 6. 15  David Wessel. 2009. In Fed We Trust. New York: Crown Business. 8  BIS Review 92/2010  market, Treasury pledged to provide the capital. The SCAP program was successful in restoring a degree of confidence in financial markets and in enabling these financial firms to raise capital on their own. By the second half of 2009, the financial fever from the Panic of 2007 had finally broken with the 3-month LIBOR/OIS spread narrowing back to pre-crisis levels. 16 The economy began to grow again. Having served their purpose, the Fed’s special liquidity facilities have been wound down. The policy focus has shifted to regulatory reforms and how to prevent a future financial crisis. To be successful, these reforms must deal with the run dynamics in the shadow banking system, as well as devise ways to limit the leverage cycle that is an integral part of asset booms and busts that can trigger a panic. If the lessons from the panics of 1907 and 2007 are incorporated into the reforms, we may well avoid the Panic of 2107. 16  Recently the spread has widened with the onset of concerns over Greece. BIS Review 92/2010  9
8  The Archbishop offered these comments at an October 12, 2014 panel discussion that was part of the International Monetary Fund 2014 Annual Meetings. A video of that discussion is available at http://www.archbishopofcanterbury.org/articles.php/5426/archbishop‐to‐take‐part‐in‐imfworld‐bank‐panel‐ onethics‐and‐finance. Notably, the Archbishop described his role at the conference as a “lion in a den of Daniels.”  9  Even the skeptics of cultural reform concede that there is “almost universal accord that remuneration structures contributed to excessive risk‐taking in financial institutions and that excessive bonuses paid on anticipated accounting profit at the time of deal origination distorted decision‐making and resulted in asymmetric riskholding.” Paradigm Risk Consulting, To boldly supervise . . . , February 2014. 10  See Dudley, Enhancing Financial Stability by Improving Culture in the Financial Services Industry, supra n.4. 4  BIS central bankers’ speeches