financial market stability and smooth credit flows, the bank of korea should appropriately deploy policy tools apart from interest rates, if necessary. in addition, we need to closely cooperate with the government to ensure that policy effects are maximized. while maintaining an accommodative monetary policy stance to overcome the crisis, we should not let our guard down against the possibility of financial imbalances building up over the medium - and long - term horizon. this is because we have seen recurring cases in which crises were caused by the accumulation of financial imbalances such as excessive credit expansions and asset price bubbles. while overcoming the current crisis with preemptive responses, we also should devise plans in advance to unwind these unprecedented measures once the crisis subsides. the covid - 19 crisis could raise questions about whether inflation targeting is suitable to the current situation. even before the crisis, inflation had been running below the target level for a considerable period. in the post - corona era, low inflation could continue for a long time as the incentive for precautionary saving increases, demand slows from accumulation of debt, and digital transformation accelerates. we will need to carry out research on how to improve the monetary policy regime, while closely monitoring the discussions among major central banks. 4 / 7 as we can see from the controversy that started last year surrounding facebook libra, digital transformation could move beyond the private sector to the central bank ’ s payment and settlement system. as an institution responsible for ensuring the safety and efficiency of the payment and settlement system, the central bank needs to proactively respond to these changes. the currently ongoing research and development on central bank digital currency must be carried out as planned. it would also be noteworthy to see how a growing number of central banks are setting up fast payment systems that they directly establish and operate under their real - time gross settlement systems in order to reduce settlement risk. lastly, as central banks respond to the recent crisis, there has been an ongoing debate over the extent to which their role should be expanded. although the currency issuing authority has been granted to the central bank by the public, it is a fundamental principle that the central bank should execute it prudently, given that the authority ultimately belongs to the public. however, during the recent crisis, there have also been growing voices calling for the central bank to take bold actions as a “ crisis fighter. ” going forward, we will need to think deeply about the extent to which we should accept calls

kevin stiroh : opening remarks - community bankers conference opening remarks by mr kevin stiroh, executive vice president of the financial institution supervision group of the federal reserve bank of new york, at the community bankers conference, hosted by the federal reserve bank of new york, new york city, 4 april 2019. * * * as prepared for delivery welcome to the 17th annual community bankers conference. we are very glad that so many of you from community banks in the second district joined us today for our conference about what ’ s “ on the horizon for community banks. ” i am also pleased to welcome my colleagues from other regulatory agencies, including doreen eberley from the fdic, who is our keynote speaker. before proceeding, let me emphasize that my remarks are my own and do not necessarily reflect those of the federal reserve bank of new york or the federal reserve system. 1 it has been more than 10 years since the financial crisis, and over that time we have seen the industry change in material ways. ten years ago there were 7, 479 community banks nationwide. today that number is 5, 320, a 29 % decline. some of this decline was due to failure, and some through consolidation or acquisition. your financial institutions remain today as a result of prudent risk management practices, resiliency, and the ability to successfully weather those stormy years. today, the data show, on average, strong metrics for the balance sheets of community banks in the second district. the quality of loans has improved due to more prudent underwriting and capital levels appropriately support the risk profile. as of 4q 2018 on average, second district ratios were slightly above the national peer average for tier 1 and total risk - based capital ratios. in terms of profitability, return on average assets was 0. 95 % in 2018 for community banks in the second district, only slightly trailing the national average of 1. 1 % for all community banks. another relevant metric is the more diversified loan mix on the balance sheets of community banks. commercial real estate ( cre ) is a major source of asset growth, and in our geography, real estate continues to be in high demand and continues to outperform certain parts of the country. for example, in the second district non - owner occupied cre concentration remains higher than the national peer average. our examiners, however, have noted more robust risk management practices and oversight, and commensurate levels of capital as mentioned earlier. as supervisors, we