debt. credit - default swaps and credit - linked notes are ways to redistribute default risks. in practice, this unbundling of risk means that a broad range of financial institutions today performs the credit intermediation process, eroding the historical comparative advantage of banks in bearing credit risk. at various times, some institutions will be underwriting issues, while others will be making bridge loans, providing credit enhancements, writing derivative contracts and taking up riskier components of securities. within the united states, the fixed - income market is today a market of some $ 13 trillion, roughly the same size as the total equity market. trading activity in fixed - income instruments is concentrated in treasury securities. on an average day, over $ 150 billion in treasury securities changes hands, about seven times the value of stocks traded daily on the new york stock exchange. all of this trading activity serves the very important function of price discovery. more than any other securities market in the united states, the treasury market responds forcefully to new information about macroeconomic fundamentals. the days when the most intense trading activity takes place are also the days when major reports are released on such indicators of u. s. economic performance as the employment report, the consumer price index or the producer price index. these releases allow market participants to digest important new information and to review their expectations about where the economy is going. the interest rates on treasury securities of varying maturities are the market ’ s most important signals about the u. s. economy ’ s prospects for growth and risks of inflation. in the rest of the fixed - income market, trading in corporate bonds, mortgage - backed securities and sovereign debt also serves the price discovery process. this trading activity acts to differentiate, for example, a triple - a risk against a triple - b risk, the prepayment risk of mortgages against the prepayment risk of credit card receivables, and oecd country risk against emerging market risk. what then is the role of central banks in this new financial landscape, where institutional investors and other nonbank financial institutions hold a larger share of assets and a larger share – 3 – of credit risk than they ever have before – and where an increasing share of conventional credit risk is intermediated through the capital markets? i would argue that the role of a central bank in this new environment is very much in keeping with its traditional responsibilities. central banks in all countries fundamentally care about the flow of credit in their economies,

john c williams : a different kind of recession remarks ( via videoconference ) by mr john c williams, president and chief executive officer of the federal reserve bank of new york, at the institute of international finance : central banking in the age of covid - 19 summit, 30 june 2020. * * * as prepared for delivery thank you for the warm introduction. when the united states entered the pandemic in march, i never expected that three and a half months later i would still be making speeches from my apartment : i look forward to the day when gathering in groups is safe and we can meet in person. we're now 17 weeks into a catastrophic pandemic which has cost over 500, 000 lives worldwide and has had a devastating effect on economies across the globe. 1 today i'm going to talk about the current state of the u. s. economy, our goals for the recovery, and how the federal reserve is responding to the worst recession in living memory. before i continue, let me give the usual disclaimer that the views i express are mine alone and do not necessarily reflect those of the federal open market committee or anyone else in the federal reserve system. a different kind of recession the economic effects of the coronavirus have caused great hardship and created enormous uncertainty. the root of this downturn — a global pandemic — means this is a completely different kind of recession compared to anything we've experienced in the past. as the pandemic unfolds, many people are starting to ask questions about our economic future : what will the recovery look like? when will it begin? and how will it be affected by the virus? it's easiest to start with the last of these questions first. the virus will continue to be at center stage throughout the economic recovery. we are traveling down a narrow path, balancing a return of economic activity with effective containment of covid - 19. the overall unemployment rate reached nearly 15 percent in april, and around 20 million americans have lost their jobs — numbers i hoped i would never see in my lifetime. these figures understate the full extent of the pandemic's toll on the economy. the pandemic and the ensuing economic downturn have done disproportionate harm to communities of color. black and hispanic families, as well as lower - wage workers, have suffered the most. 2 those who least can afford it have been hardest hit, making a strong and full economic recovery