Speech by Chairman Bernanke on financial reform to address systemic risk

by Sabrina I. Pacifici on March 10, 2009

Chairman Ben S. Bernanke At the Council on Foreign Relations, Washington, D.C. March 10, 2009, Financial Reform to Address Systemic Risk

  • “The first element of my proposed reform agenda covers systemically important institutions considered individually. The second element focuses on interactions among firms as mediated by what I have called the financial infrastructure, or the financial plumbing if you will: the institutions that support trading, payments, clearing, and settlement. Here the aim should be not only to help make the financial system as a whole better able to withstand future shocks, but also to mitigate moral hazard and the problem of too big to fail by reducing the range of circumstances in which systemic stability concerns might prompt government intervention…In light of the importance of money market mutual funds–and, in particular, the crucial role they play in the commercial paper market, a key source of funding for many businesses–policymakers should consider how to increase the resiliency of those funds that are susceptible to runs…”
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