Fed’s Brainard Sets Out Reform Plan for Covid-Stressed Markets
- Money and bond funds and Treasury market will be reviewed
- Brainard is governor in charge of financial stability
Federal Reserve Governor Lael Brainard described a broad regulatory reform agenda for the coming months aimed at fixing a financial system that proved too fragile to stand up to the pandemic shock and required unprecedented assistance from taxpayer-backed emergency facilities.
“Regulators and international standard-setting bodies have an opportunity to draw important lessons from the COVID shock about where fragilities remain,” Brainard said Monday in prepared remarks to the Institute of International Bankers. “A number of common-sense reforms are needed to address the unresolved structural vulnerabilities in non-bank financial intermediation and short-term funding markets.”
Brainard chairs the Fed Board committee on financial stability and oversees a division dedicated to that effort. The Fed had to backstop money market mutual funds, the corporate bond market, and provide large amounts of liquidity to the U.S. bond dealers to keep the financial system stable when the pandemic washed over markets a year ago. She also sits on a committee that oversees bank supervision and regulation that is chaired by Randal Quarles, Fed vice chair for supervision, with whom she has disagreed with in the past.