protecting consumers while ensuring that creditors continue to provide credit responsibly. an important part of my research as an economics professor at the university of chicago, and my practical policy work as a member of the council of economic advisers, was devoted to banking and financial regulation as well as banking and financial crises. the safety and soundness of the u. s. banking and payments systems is critical to achieving economic growth, maximum employment, and general economic stability, and the federal reserve works closely with other regulators to achieve this goal. the federal reserve also has an important role to play in responding to and mitigating the impact of financial crises and shocks. if confirmed, i would continue to work vigorously to protect and promote the safety and soundness of the system. thank you once again for holding this hearing, and i look forward to your questions.

##bly pegged and publish its available reserves on a regular basis. the simplicity of the goal facilitates communication and provides a single focus for policy. however, in a regime with multiple objectives, central bank officials must try to be transparent with respect to more than one objective. in short, as others have noted, more - complicated mandates require more - intricate communication. in that case, clearly summarizing a balancing of the goals would be more difficult in a short announcement, requiring as well other vehicles for describing the basis for policy moves, such as the fomc minutes and the semi - annual report on monetary policy. recent specific suggestions about central bank transparency i would now like to turn to some recent specific recommendations for improved transparency, in some cases with respect to the federal reserve system. these include the quantification of the central bank ’ s objectives, the publication of forecasts, and the earlier release of minutes. first, a central bank, the argument goes, should adopt and explicitly reveal numerical goals for its objectives in order to facilitate holding the monetary authority accountable, to reduce uncertainty, and to anchor private expectations about such things as inflation trends and monetary policy decisions. for example, many countries in recent years have set a single quantitative inflation goal. but, in my view, this approach has potential drawbacks. as i have noted on previous occasions, even in the case of a single inflation goal, the selection of a particular price index to guide policy is difficult, and the appropriate index and inflation value might change over time as the structure of the economy evolves and the pace and nature of technological advances vary. inflation targets also present problems in the presence of supply shocks, such as large increases in oil prices, that may simultaneously increase the price level and decrease aggregate output. most inflation - targeting central banks attempt to gain flexibility in such cases by focusing on core inflation, by having relatively wide target ranges, by stipulating “ escape clauses ” that allow inflation to diverge from the target for a while, or by aiming at inflation well in the future or at an average rate over the business cycle and thus allowing enough time for the effect of such shocks to have died down. despite such elements of flexibility, an inflation - targeting regime may still not typically attend sufficiently to output variation or financial stability. furthermore, these elements of flexibility may not foster the credibility of the central bank any better than a system of multiple objectives. the longer the policy timeframe and the wider the band for an inflation - targeting regime