Don’t take this debate for disagreement about the broader goal: I am convinced that all FOMC members are committed to taking whatever steps they deem would help advance the dual mandate of price stability and full employment. For my own part, I am deeply unhappy with the current forecast of prolonged high unemployment, and will continue to review whether there is more that we could do that would bring more benefit than cost. Monetary policy must do its part. But there is a strong case for complementary policy actions because such actions can help secure better outcomes than can be achieved through monetary policy alone. If we are to achieve the best possible recovery and build for the future, we will also need ongoing efforts across four broad fronts: financial stability, housing policy, fiscal policy and structural adjustment to foster more sustainable U.S. growth and a more balanced global economy. Ongoing attention to financial stability and the reform and repair of the financial system is essential to support recovery. We need to make sure this proceeds in a manner that is not pro-cyclical, and for this reason we are, for instance, phasing in new capital and liquidity standards, and monitoring how institutions adjust to the new requirements. Nonetheless, the financial system must be healthy to support sustained access to credit. If we want those households and businesses with low levels of debt to reduce precautionary saving, we need to restore their confidence in the financial system.
William C Dudley: Securing the recovery and building for the future Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the United States Military Academy at West Point, West Point, New York, 17 November 2011. *  *  *  I am honored to have the opportunity to speak to you today in the hallowed halls of West Point. I do not need to tell anyone here of the long and distinguished tradition of this institution and the U.S. Army. I believe that the U.S. military is one of our nation’s greatest institutions and a living demonstration of the best of America. Your example of national service inspires us all to live up to our duty to do all we can to advance the national interest. I am the president of the Federal Reserve Bank of New York, part of the Federal Reserve System that serves as our nation’s central bank. In this capacity I am also vice chairman of the Federal Open Market Committee (FOMC), the Federal Reserve committee that sets interest rates and makes other decisions about monetary policy. This committee sets policy to advance the mandate given to us by Congress: to promote maximum employment and price stability. In the support of these objectives I and my colleagues must also guard as best we can against threats to financial stability, because credit is the lifeblood of the economy.