William C Dudley: Brief remarks about the centennial “The Fed at 100” Exhibit Introductory remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Museum of American Finance, New York City, 25 September 2013. *  *  *  Thank you all for being here to commemorate the opening of the centennial exhibit for the Federal Reserve System and the Federal Reserve Bank of New York at the Museum of American Finance, just a few blocks from the New York Fed’s landmark head office at 33 Liberty Street. I would like to say thank you to our friends at the Museum for their work and interest in the Fed and for supporting us in organizing this event. Before making some brief remarks about the centennial, I would also like to acknowledge some of the people in attendance tonight. We have two former New York Fed presidents here this evening: Jerry Corrigan and Bill McDonough. I met Jerry, the seventh president of the Bank, when I was still wet behind the ears. I was just out of graduate school at the Board of Governors in Washington, but Jerry was already a force to be reckoned with and a part of Paul Volcker’s inner circle. Jerry’s tenure as president had many memorable moments, including the October 1987 stock market “break”.
And it is that attitude, ability and esprit de corps that will no doubt allow us and the System to meet the important challenges on the road ahead. I will focus briefly on a few such challenges: The first will be on the monetary policy front. The Federal Reserve has engaged in a set of unconventional monetary policies in recent years. These policies have been necessary because the FOMC could not ease monetary policy further by conventional means – the federal funds rate was constrained by the so-called “zero lower bound”. Exit from these unconventional set of policies is certainly feasible – the ability to pay interest on excess reserves gives us a viable tool to manage monetary policy even with an enlarged balance sheet, and the New York Fed is prepared to execute on this mission, as we always are. But we do have to be a bit humble about what we don’t know. There will undoubtedly be communications and operational challenges and unexpected consequences. We will need to be sufficiently agile so that we can best achieve our dual mandate of maximum sustainable employment in the context of price stability. The second challenge for us at the New York Fed, and within the regulatory community more generally, will be in staying the course and implementing a regulatory regime in which no institutions are “too big to fail” (TBTF). TBTF is wrong for several reasons. It creates an unfair disparity between large and small institutions.