Chairman Ben S. Bernanke
Opening remarks
At the Conference on the Regulation of Systemic Risk, Federal Reserve Board,
Washington, D.C.
September 15, 2011
Distinguished guests, I would like to welcome you to this conference on the "Regulation of Systemic Risk," which is jointly sponsored by the Federal Reserve Board and the Journal of Money, Credit and Banking. 1 It is the fourth conference in a series that was initiated in 2005 and is held every two years. These conferences support original research on topics that are highly relevant for the Federal Reserve's public policy mission. Conference proceedings are subsequently published in special issues of the journal and disseminated to researchers at central banks and academic institutions worldwide.
While the previous three conferences focused on monetary policy issues, the papers presented at this conference relate to the Federal Reserve's duty to maintain financial stability and contain systemic risk. The Dodd-Frank Wall Street Reform and Consumer Protection Act now requires the Federal Reserve to take a macroprudential approach to financial regulation--that is, to consider the health of the financial system as well as the health of individual firms and markets.
The recent financial crisis has spurred a great deal of research on its causes and, more broadly, on the topic of systemic risk and its regulation. This research is of critical importance. It can inform the design and implementation of macroprudential regulations and policies, and I suspect no one in this audience needs to be convinced that we must get this right. The nine papers at this conference make a variety of welcome contributions in this area. Two focus on an important aspect of the recent financial crisis--namely, the rise and fall of mortgage securitization and associated swings in real estate lending.2 Other papers study the causes and indicators of systemic risk more generally and look at how well macroprudential regulations and policies can address those causes.3 Finally, several papers examine specific regulations from a macroprudential perspective, including capital requirements and risk retention rules for securitization.4
The discussants' remarks, the general discussions, and the policy panel will surely be very helpful in identifying fruitful directions for further research. I welcome you to the Federal Reserve and wish you a stimulating and productive conference.
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