The difficulty today is one that monetary policy must address – this is to balance the risks of removing the stimulus from the expansionary monetary policy too soon, starving a recovery while it is still immature, against the risk of allowing inflation and inflation expectations to become stuck at above the target level. Balancing those risks in the UK is not easy. That is the issue the Monetary Policy Committee at the Bank of England faces today and the one I now want to explore. The immediate monetary policy problem The financial crisis dealt a huge blow to the financial infrastructure in most of the developed world. In the UK, and here in Ireland, the financial system came close to total breakdown. It was not so much that virtually no-one thought this sort of thing would happen. It was worse than that; virtually no-one thought this sort of thing could happen. But it did happen. As a result the supply of credit to businesses and to households was – and continues to be – seriously affected. The confidence of businesses and households has been severely dented. Fiscal deficits have exploded; private sector investment has imploded. Whatever the aftermath of this event is – and we will not know that for many years – I very much doubt it will be a normal cyclical recovery after a downturn.
SPEECH  Price Stability: The Foundation for a Strong Economy July 08, 2022 John C. Williams, President and Chief Executive Officer Remarks at the University of Puerto Rico – Mayagüez, Mayagüez, Puerto Rico As prepared for delivery  It's a pleasure to be here this morning at the University of Puerto Rico's beautiful Mayagüez campus. Thank you for that kind introduction. This visit is part of the New York Fed's broader commitment to serving the diverse economies in the Federal Reserve's Second District, which—in addition to Puerto Rico—includes the U.S. Virgin Islands, New York State, northern New Jersey, and parts of Connecticut. Here in Puerto Rico, we supervise four commercial banking organizations that account for a large part of the deposit and lending activities on the island. We also provide cash services to depository institutions located in Puerto Rico and the U.S. Virgin Islands. To take one example, the New York Fed coordinated an extensive effort to keep cash operations on the island functional following Hurricane Maria, ensuring adequate supply and meeting the demand for much-needed currency. We also study issues that affect the communities here, and our economists monitor economic conditions that inform our work.1 I'll start by saying that I am so pleased that in many respects the Puerto Rican economy has recovered strongly from the hurricanes and the pandemic. Over the course of my visit, I've had the opportunity to hear firsthand from business, government, and community leaders about what is happening on the island.