window lending is no longer confidential. these loans, including the names of borrowing institutions, are now required to be disclosed with a two - year lag. 12 changes made by the new law and other subsequent changes have attempted to strike a balance between making firms more resilient to stress and adding additional parameters to the fed ’ s liquidity tools. the complementary tools we have — the prudential bank regulatory framework, tools to promote banking system liquidity and stability, discount window lending and “ lender of last resort ” authority, and resolution tools — all contribute to the safety and soundness of individual banks, and more broadly, to financial stability. broadly defined, the challenge we face is that banking crises and banking stress can arise from unpredictable events. they can be the product of external events ( like a global pandemic ) or can arise from cascading failures of bank management and regulators to identify and the dodd - frank act also increased the deposit insurance limit from $ 100, 000 to $ 250, 000. see pub. l. no. 111 – 203, 124 stat. 1540 ( 2010 ), § 335 ; 12 u. s. c. § 1821 ( a ) ( 1 ) ( e ). dodd - frank act, pub. l. no. 111 – 203, 124 stat. 2113, 2118 ( 2010 ), § § 1101 and 1103. dodd - frank act, pub. l. no. 111 – 203, 124 stat. 2118 ( 2010 ), § 1103 ( b ). - 5effectively address and mitigate the buildup of risk. this risk can occur at a single institution, like we saw in the lead - up to the failure of svb, or more broadly throughout the financial system, as we saw during the last financial crisis. when we consider banking system stress and potential crises in the broader context, our primary goal should always be prevention, particularly so that we can avoid contagion risks that lead to financial instability and more significant government intervention. we should be reluctant to intervene in private markets, including using emergency government lending facilities to support private enterprises. the federal safety net that covers the banking system — including discount window lending and deposit insurance — is meant to make the u. s. banking system and broader economy more resilient. where market disruptions affect liquidity, it is important that these tools — particularly discount window lending — function effectively. so, we must ask whether there are

for release on delivery 9 : 30 a. m. edt april 3, 2024 bank liquidity, regulation, and the fed ’ s role as lender of last resort remarks by michelle w. bowman member board of governors of the federal reserve system at the roundtable on the lender of last resort : the 2023 banking crisis and covid, sponsored by the committee on capital markets regulation washington, d. c. april 3, 2024 today ’ s roundtable comes at an opportune time, as we recently passed the one - year anniversary of the failures of silicon valley bank ( svb ) and signature bank. 1 the long shadow of these bank failures, and the subsequent failure of first republic, have prompted a great deal of discussion about the bank regulatory framework, including capital regulation, the approach to supervision, and the role of tailoring, among other topics. it is my hope that our discussion today reviews and considers the appropriate role of the federal reserve in providing liquidity to the u. s. banking system and, of course, its role as the “ lender of last resort ” through the discount window and authority under section 13 ( 3 ) of the federal reserve act. i look forward to today ’ s panels and a deeper examination of important policy questions, including the lessons that should be learned from the banking system stress experienced last spring, the broader stress in financial markets during the covid - 19 crisis, potential approaches to operationally enhance and optimize tools like the discount window to more effectively meet industry liquidity needs, and the importance of effective resolution mechanisms in the banking system. before the panels get into a “ deep dive ” on these policy issues, i would like to briefly touch on three main themes : ( 1 ) the broader framework in which the federal reserve supports liquidity in the banking system, particularly how this function complements other regulatory requirements and sources of liquidity ; ( 2 ) how this function can be optimized to work within the evolving liquidity framework ; and ( 3 ) the challenges we face in making the federal reserve ’ s liquidity tools, particularly the discount window, effective. the views expressed here are my own and are not necessarily those of my colleagues on the federal reserve board or the federal open market committee. - 2the federal reserve ’ s role in banking system liquidity the complexity of the u. s. financial system makes it difficult to predict where the next stress ( or in the worst case, the next crisis