Central banks are permanently asymmetrically called on to privilege more the short term to the detriment of the medium and long term and this by all sensitivities, all constituencies whether private or public … We were made independent precisely because our democracies rely on us to reason also medium to long term, and to avoid being exclusively trapped in short-term considerations. In my own experience, this is both a national and international experience in the euro area: I know practically of no constituency which would call on us to increase rates at any time! I experienced all the consequences in the 1980s of the second oil shock and the defaults of sovereign states, which were the mark of the 1980s. We had a very negative consequence of  4  BIS Review 159/2008  these dramatic oil shocks and commodity price shocks that we had to cope with in the 2000s, because there has been, on top of the savings glut, an additional pot of forced savings that were accumulated at the level of the global economy by the oil and commodity producers. That created an additional element of capital chasing investment and hunting for yields. You then had a very low level of spread, a very low level of volatility and a very low level of risk premia, which contributed to create an asset bubble, asset price inflation. FT: Are there measures that you could take or policies that you should adopt in order to avoid another wave of volatility?
John C Williams: Banking culture - the path ahead Remarks by Mr John C Williams, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the conference "Building Cultural Capital in the Financial Services Industry: Emerging Practices, Risks and Opportunities", Federal Reserve Bank of New York, New York City, 4 June 2019. * * * As prepared for delivery Good morning, everyone. I’d like to begin by welcoming you to the Federal Reserve Bank of New York and to the fifth conference on culture in financial services that we’ve hosted. Before I launch into my remarks, it’s time I remind everyone that the views I express today are mine alone and do not necessarily reflect those of the Federal Open Market Committee or others in the Federal Reserve System. When I took on the role as President of the New York Fed last year it so happened that my first day coincided with this conference. In my remarks that day, I emphasized that culture is a longterm project, a constantly evolving one, which is never done. The trouble with long-term projects with no distinct finish line is that they can lack a sense of urgency. The pressure to make real progress is often missing, especially when there are so many other priorities competing for our time. Headlines in the financial news illustrate the lack of progress. In the year since our last conference, stories of money laundering and fraud have been an all-too-frequent feature.