But, I would prefer having such a tool available in extremis given the potential need to buy time for coordination and critical decision-making. I think it is important to ensure that one can “get to the weekend.” Finally, the work needed to ensure that CCPs can always recover has not yet been completed. This is an issue of increased importance given that their role in the financial system has become more prominent. Where the pendulum may have swung too far At the same time, there are some areas where the pendulum may have swung too far, where the costs of regulation—including compliance costs and the potential impact on the provision of services—are likely to exceed the benefits. In this vein, I favor regulatory relief for smaller banking organizations. First, such firms individually are not systemically important, and therefore do not pose a significant risk to the viability of the U.S. financial system. Second, the regulatory burdens on smaller firms can be heavy because they don’t have the scale over which compliance and other regulatory costs can be spread. Regulatory requirements should be appropriately calibrated to avoid inadvertently creating a competitive advantage for larger financial firms. 5/7  BIS central bankers' speeches  I also think that the Volcker rule could be modified so that its implementation would be less burdensome. As I see it, regulators could review the criteria for permissible market-making. Trading activity should be viewed as market-making when it is customer-facing and inventories are not excessively large or stale.
William C Dudley: Lessons from the financial crisis Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Economic Club of New York, New York City, 6 November 2017. * * * James Bergen, Caren Cox, Gerard Dages, Beverly Hirtle, Anna Kovner, Lisa Kraidin, Lorie Logan, Jonathan McCarthy, and Kevin Stiroh assisted in the preparation of these remarks It is a pleasure to have the opportunity today to speak again at the Economic Club of New York. As we mark the tenth anniversary of the onset of the financial crisis, I would like to focus on some of the lessons we should draw from that harrowing experience, and the implications of those lessons for regulatory policy going forward. As always, what I have to say reflects my own views and opinions and not necessarily those of the Federal Open Market Committee or the Federal Reserve System. The first lesson is that financial crises can have grave consequences—for the economy and the nation—that can linger for many years. The toll from the financial crisis was severe, with nine million jobs lost and eight million housing foreclosures amid the deepest economic downturn since the Great Depression. Moreover, the road back has been long and slow. Despite economic policies oriented toward supporting recovery, it has taken eight years to push the unemployment rate down to a level consistent with the Federal Reserve’s employment objective.