That was very different a year ago. Financial conditions were actually tightening quite sharply a year ago. And it wasn’t really clear how far that was actually going to run. Maureen O’Hara: There we go, question? Audience Member: Can you talk a little bit about balance sheet normalization, how you think about that in the context of monetary policy? In the September FOMC, you guys talked about thinking about balance sheet normalization in terms of when your rate hikes are well under way. What does “well under way” mean, how are you thinking about that? President Dudley: I’m sure “well under way” means different things with different people. I think the — we made it pretty clear in terms of our statements that we sort of want the active tool of policy to be shortterm interest rates. And the balance sheet to be sort of in the background. We’ve also said that we wanted to get some room off the zero bound before we actually start to normalize the balance sheet, to end the reinvestment. Now I think my own personal view is, how soon you want that process to start depends not just about how much margin you have between the current federal funds rate and zero, but also how confident you are that you’re actually not going to need to reduce the federal funds rate in the near-term.
You know people talk about, well, it’s hard to know where to operate in a gray area, I think a lot of the behavior was way over the line. When people are getting together in chat rooms trying to talk about how they can collude to rig a market, that’s not in the gray area. That’s way over the line. When people are consciously doing things to evade any money laundering rules and sanctions, that’s not in a gray area, that’s way over the line. So I feel that most of the things that have resulted in fines can be tied to things that are not in a gray area. They’re just way over the line. Now the question of whether the fines are excessive – I mean it’s hard to know how you take the behavior and then map it back onto the fine. I think the important thing, though, is to make the fines big enough so that the senior management of these institutions doesn’t just say, “Well, I can just write a check, accept the bad behavior, and move on." If the fines are substantial, then it actually gets some senior management’s attention, and I think that’s one of the reasons why banks are working harder on the issues of culture in their institutions. I’ve actually been very – you know, you asked me the question, is bank bad behavior over?