Randal K Quarles: Supervision and regulation

Testimony by Mr Randal K Quarles, Vice Chair for Supervision of the Board of Governors of the Federal Reserve System, before the Committee on Financial Services, US House of Representatives, Washington DC, 19 May 2021.

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

Chairwoman Waters, Ranking Member McHenry, members of the Committee, thank you for the invitation to testify today. Last May, my colleagues and I came before you-in a virtual format for the first time-discussing our actions to maintain a strong banking sector as a source of support for consumers, households, and businesses. I'd like to thank the Committee for its flexibility and its commitment to ongoing, open dialogue, especially in the course of such a challenging year.

My remarks one year ago came after the onset of sudden and pervasive financial stress. Early turmoil in overseas financial markets quickly crossed borders and, within days, had reached almost every asset class and corner of the financial system. From the beginning, the causes of this strain were clear, rooted in the policy measures taken to address the outbreak of COVID-19. But at that time, the full implications of the COVID event remained unclear, and the costs would continue to mount.

The American economy and banking sector then remained at the edge of the storm, with one wave of stress behind us and others yet to come. Today, the storm waters are receding. The economy is beginning a strong recovery, which owes much to an extraordinary, coordinated, and sustained campaign of support, by both Congress and the Federal Reserve, that helped clear a path to the other side of the COVID event.