Cornell Professor Comments on the Fed Changing the Rules to Prevent a Repeat of 2008 Crisis
Source Newsroom: Cornell University
Robert Hockett, professor of financial and monetary law at Cornell University Law School, says while the Fed has done nearly everything it can to prevent another banking crisis, underlying flaws in the economy must be addressed.
“Today the Fed and Treasury took another important step in safeguarding the banking system against any repeat of the crisis of 2008-09. Combined with the new capital, SIFI and 'stress test' regimes put in place over the past several years, the new liquidity rules adopted today will help prevent sudden threats to bank solvency and financial stability.
Over the longer term, however, it still will be crucial to address underlying flaws in the 'real' economy that result in worsening income inequality and consequent over-reliance on private debt to fuel economic growth and employment. The Fed can do much - and has done nearly all that it can - but it cannot do everything.”
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