Warning against “the mistake of believing that we have put an end to financial crises” at the International Monetary Conference in Toronto today, Federal Reserve Vice Chairman Stanley Fischer defended the international post-financial crisis regulatory regime as necessary to prevent similar crises in the future.
“We can strengthen the financial system, and reduce the frequency and the severity of financial crises,” Fischer said. “But we lack the capacity of imagining, anticipating and preventing all future financial sector problems and crises. That given, we need to build a financial system that is strong enough to withstand the type of financial crisis we continue to battle.”
ABA EVP Wayne Abernathy applauded Fischer’s emphasis on strengthening the resilience of the financial system, recognizing that crises and challenges will still come. Abernathy added that with a sweeping new array of new regulations soon to be completed, “the time is right for a thorough review of how the various pieces work when taken together. Prudential regulation should not devolve into a new compliance exercise but rather remain a big-picture supervisory program that allows regulators and banks to do their important jobs.”