Federal Reserve Chairman Ben Bernanke comments before the House of Representatives concerning regulatory restructuring:
The role of the Federal Reserve in a reoriented financial regulatory system derives, in our view, directly from its position as the nation's central bank.
Financial stability is integral to the achievement of maximum employment and price stability, the dual mandate that Congress has conferred on the Federal Reserve as its objectives in the conduct of monetary policy.
Indeed, there are some important synergies between systemic risk regulation and monetary policy, as insights garnered from each of those functions informs the performance of the other.
Close familiarity with private credit relationships, particularly among the largest financial institutions and through critical payment and settlement systems, makes monetary policy makers better able to anticipate how their actions will affect the economy.
Conversely, the substantial economic analysis that accompanies monetary policy decisions can reveal potential vulnerabilities of financial institutions.
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