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Speech
Inflation Targeting and the Conduct of Monetary Policy
I am pleased to be here with you today to talk about inflation targeting and the conduct of monetary policy. I would like to thank Dr. Coughlan, Dean Newman and the University of Richmond for giving me an opportunity at this time to express my views on this important subject. The timing is right for two reasons. It has been just a little more than half a year since I became president of the Federal Reserve Bank of Richmond. As bank president, I participate regularly in the Federal Open Market Committee, the body that makes monetary policy in the United States. And I welcome this as an ...
Speech
Economic Outlook, January 2015
While GDP growth in 2015 may revert to its post-recession average of around 2 ¼ percent, there are reasons to believe that growth could rise to between 2 ½ and 3 percent this year.We have seen pickups at other times during this expansion, only to see them subside, but the recent strength in consumer spending and the decline in the saving rate suggest the current higher growth rate can be sustained. Many labor market indicators also have strengthened.The economy still faces some challenges, however, including sluggishness in the housing market, potentially weaker exports and declines in ...
Report
Should the Fed Have a Financial Stability Mandate? Lessons from the Fed's first 100 Years
President Jeffrey Lacker and Research Publications Content Manager Renee Haltom explore the Fed's role in financial stability. Following the global financial crisis of 2007-08, the Fed has been given enhanced regulatory responsibilities to prevent future crises. However, most of the Fed's actions in pursuit of financial stability have historically come through emergency lending once crises are underway. The authors conclude that arguments in favor of emergency lending are based on erroneous readings of history. Instead, emergency lending may undermine financial stability, as well as the Fed's ...
Working Paper
Clearing, settlement, and monetary policy
This paper develops a general equilibrium model of the clearing and settlement of private payment instruments. Spatial separation, heterogeneous preference shocks and limited communication provide a role for private credit as a means of payment. Although this method could be applied to various settlement arrangements, the use of central bank deposit liabilities in settlement is studied here. Various tools of payment system policy, such as intraday overdraft limits and fees, collateral requirements, reserve requirements, and interest on reserves, are examined.
Speech
Address to the Oversight and Investigations Subcommittee, Committee on Financial Services
Good afternoon. I'm honored to speak to this Subcommittee about the federal government's financial safety net and how the Dodd Frank Wall Street Reform and Consumer Protection Act seeks to address it.At the outset, I should point out that within the Federal Reserve System the Board of Governors has sole authority to write rules implementing the requirements of the Dodd-Frank Act. Federal Reserve Banks supervise financial institutions under authority delegated to them by the Board of Governors. In keeping with Board of Governors guidance, I will not discuss any current or potential Federal ...
Working Paper
A "coalition proof" equilibrium for a private information credit economy
This paper examines an economy in which agents with private information about their own productive capabilities seek to raise capital to fund their investment projects. We employ an equilibrium concept which is closely related to Coalition Proof Nash Equilibrium. In equilibrium, all agents who succeed in raising capital (entrepreneurs) are pooled; they all receive the same contract or consumption schedule. Entrepreneurs, however, are separated from those who fail to raise capital. This separation results in productive efficiency for the economy. If the economy has no viable alternative ...
Speech
Economics, Policy and Politics
President Lacker discusses "Economics, Policy and Politics" with West Virginia University students.
Speech
The Regional Economic Outlook
It is a pleasure to be with you today to discuss the economic outlook for the region. I work, as Barbara’s kind introduction noted, at the Federal Reserve Bank of Richmond. The fact that our nation’s capital lies within the Richmond Federal Reserve District, rather than the other way around, is an odd byproduct of decisions made over 90 years ago. When establishing the Federal Reserve System as the nation’s central bank, Congress created a confederation of regional banks, rather than a single, centrally located bank. The founding organizers then made Richmond the headquarters for the ...
Speech
The Economic Outlook
As you are well aware, we are suffering through a severe recession. It is likely that, by at least some measures, this recession will prove to be more severe than any other recession in the last 60 years. The beginning of last year marked the onset of the recession, and the rate of decline became particularly acute last fall. All economic contractions eventually come to an end, however, and the growth process resumes. Where are we in this process? As I will discuss, while overall activity is still contracting, it now appears as if the pace of contraction is diminishing, and at some point ...