a dynamic financial system, and our stress - testing process must be dynamic as well. more broadly, the core of the federal reserve ’ s independence is a broad consensus around the 2 / 3 bis central bankers'speeches value and public worth of our mission. the federal reserve is the steward and trustee of that mission, but the public is its owner. to serve the public, we must not just allow input, but welcome it ; not just permit debate, but foster it ; not just allow participation, but treat it as essential to our work. thank you. 1 pub. l. no. 305 ( 1935 ). 2 board of governors of the federal reserve system, “ treasury and federal reserve statements, ” federal reserve bulletin 37 ( march 1951 ) : 237. 3 see board of governors of the federal reserve system, diversity and inclusion strategic plan 2016 – 19 ( washington : board of governors, december 2016 ). 4 see board of governors of the federal reserve system, “ advisory councils ” ( january 25, 2019 ). 5 board of governors of the federal reserve system, financial stability report ( pdf ) ( washington : board of governors, november 2018 ) ; board of governors of the federal reserve system, federal reserve supervision and regulation report ( washington : board of governors, november 2018 ). 6 the fomc ’ s “ statement on longer - run goals and monetary policy strategy, ” first issued in january 2012 and reaffirmed each january, specifies that the committee judges that inflation at the rate of 2 percent, as measured by the annual change in the price index for personal consumption expenditures, is most consistent over the longer run with the federal reserve ’ s statutory mandate and that the committee would be concerned if inflation were running persistently above or below this objective. 7 board of governors of the federal reserve system, “ federal reserve board releases scenarios for 2019 comprehensive capital analysis and review ( ccar ) and dodd - frank act stress test exercises, ” news release, february 5, 2018. 8 see board of governors of the federal reserve system, federal deposit insurance corporation, and office of the comptroller of the currency, “ interagency statement regarding the impact of the economic growth, regulatory relief, and consumer protection act ( egrrcpa ) ( pdf ), ” news release, july 6, 2018. 9 changes proposed as part of the economic growth, regulatory relief, and consumer protection act have been proposed but not finalized. similarly, changes as part of the proposed “ stress capital buffer

randal k quarles : inviting participation - the public's role in stress testing's next chapter speech by mr randal k quarles, vice chairman for supervision of the board of governors of the federal reserve system, to the council for economic education, new york city, 6 february 2019. * * * thank you, nan, for that kind introduction, and thank you to president mester of the federal reserve bank of cleveland for inviting me to speak this evening. i am honored to be here and to support the mission that you and the council for economic education have worked so hard to advance — that every student in america gets a strong, early start on their financial education. that mission is critical in its own right, but it also reflects the deeply held value of participation — of giving young people the chance to shape not just their own futures, but also the futures of their communities and their country. because so much of the language of finance is couched in terms of metrics and rationality, we often forget that finance is something we never do alone. it is, by definition, a collaboration, which helps us work together to achieve common goals. the federal reserve is no exception. tonight, i want to briefly discuss the role that participation plays in the federal reserve ’ s work and outline one effort to solicit broad participation — an upcoming conference on stress tests, intended to make those tests more open, transparent, and effective. public institutions exist under a grant of trust from the people they serve, to pursue a specific policy goal. when the public holds an institution accountable for that grant, the institution becomes stronger. the federal reserve system we know today emerged through decades of legislation, public consultation, and debate — from the original federal reserve act, which created the federal reserve system, to the banking act of 1935, 1 which established the modern federal open market committee ( fomc ), to the treasury - federal reserve accord of 1951 ( pdf ), which ensured the separation of monetary and fiscal policy. 2 these changes made our economy and our country stronger, because they improved the federal reserve ’ s ability to accomplish the mission congress assigned it. throughout this evolution, a key principle has been that accountability allows the federal reserve to be independent — that we are subject to challenge, to counterargument, and to the emergence of new evidence and ideas. for our work to remain legitimate, the public must be able to see, understand, and engage with our efforts ;