The concept of macroprudential policies is hardly new and can be traced back to as early as the late 1970s, in reference to the macroeconomic and financial stability implications from the rapid pace of lending to developing economies3. Some emerging markets, including Asia, have, since the 1990s, deployed macro-prudential policy instruments to manage imbalances in the financial system and capital flows. Following the recent global financial crisis, greater attention is now being focused on the role, scope, instruments and governance arrangements for macro-prudential policy to preserve financial stability. New or strengthened mandates for macro-prudential policies are being established in a growing number of jurisdictions, supported by wide-ranging changes to the legislative framework and institutional structures. Used effectively in combination with other policy tools, including micro-prudential measures and monetary and fiscal policy tools, macro-prudential policies have been demonstrated to significantly improve financial stability outcomes. Effectively operationalising macro-prudential policy frameworks, however, remains a key challenge. By design, macro-prudential policies are intended to reduce the probability and severity of a future crisis. While further research will deepen our understanding of leading indicators and transmission channels, judgments will continue to have a key role. History has shown that political economic considerations have, at times, had an effect on the willingness of policymakers to act. Despite the high costs of crisis on the financial system on the economy and on the society, there is still an inherent bias towards inaction. This underscores the need for a stronger focus on creating an environment in which policymakers will have the confidence to act.

The policies we enact at the FOMC are vitally important for sustaining growth at the national level, but they can’t determine everything that happens at the local level. This is where our community development work comes in. Through our research and outreach, we put data and analysis into the hands of community leaders to give them tools to strengthen their local economies. We have programs that use our convening power to bring together stakeholders to share knowledge—our workforce development program is a key example. And finally, we use our research to catalyze action and investment. Tools such as our resource guidebooks serve as a starting point for investors. Conclusion I started by talking about our goals—keeping prices stable and ensuring maximum employment. These things are essential for a strong and prosperous economy. And while the current picture is complex, the economy is in a good place. But not every community has benefited from the growth of the last decade to the same degree. At the New York Fed, we are committed to understanding what drives growth, economic inequality, and what creates opportunity. Those are the insights that drive my fascination with economics and my commitment to the Federal Reserve and its public mission. Those are the insights from the data we need to leverage, so that all parts of the U.S. economy can reach their full potential. 1 John C. Williams, Monetary Policy: A ‘Data Dependent’ Approach , Remarks at the New Jersey Bankers  Association’s Economic Leadership Forum, Somerset, New Jersey (January 18, 2019).