Lael Brainard: Assessing financial stability over the cycle

Speech by Ms Lael Brainard, Member of the Board of Governors of the Federal Reserve System, at the Peterson Institute for International Economics, Washington DC, 7 December 2018.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Financial stability is integral to achieving the Federal Reserve's objectives of full employment and price stability. We need only look back a decade to see the dramatic damage from financial vulnerabilities that increase unchecked: Millions of Americans lost their livelihoods and their homes, business losses and failures rose, and the government had to provide extraordinary support to the system. Since then, financial sector resilience has strengthened, and household balance sheets have been repaired over the course of a lengthy recovery. Today employment is strong, inflation is around target, and incomes are growing.