Don Kohn, the Fed’s former vice chair for financial supervision, warns of ‘urgent’ threat of another financial crisis
Don Kohn calls on Congress to pass financial stability mandates for regulators arguing that the central bank must prepare now for a potential bubble bursting through prudential regulation.
One strategy for insulating the U.S. economy from the bursting of an asset bubble would be to require major banks to fund themselves with less debt and more equity, in the form of retained earnings or money raised from stockholders.
In a a speech to the Federal Reserve Bank of Kansas City’s annual Jackson Hole Economic Policy Symposium, https://www.brookings.edu/wp-content/uploads/2021/08/Don-Kohn_Jackson-Hole-2021.pdf
Kohn urged the Fed to increase the counter-cyclical capital buffer, something that Randal Quarles, the current Fed vice chairman for financial supervision, has resisted doing
MarketWatch Aug. 30, 2021
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