to be resolved upon failure without causing systemic risks for the broader economy. but most firms with total assets between $ 100 billion and $ 250 billion do not pose a high degree of resolvability risk, especially if they are less complex and less interconnected. therefore, we should consider scaling back or removing entirely resolution planning requirements for most of the firms in that asset range. further, we should consider limiting the scope of application of resolution planning requirements to only the largest, most complex, and most interconnected banking firms because their failure poses the greatest spillover risks to the broader economy. for firms that would still be subject to resolution planning requirements, we could reduce the frequency and burden of such requirements, 4 / 5 bis central bankers'speeches perhaps by requiring more - targeted resolution plans. conclusion in conclusion, i believe we have a unique opportunity to further tailor our supervision and regulation framework for large banks in a manner that allows us to be more risk - sensitive while still meeting our core goals of promoting safety and soundness and enhancing financial stability. the recent legislation requires the board to tailor its framework of supervision and regulation of large firms in a manner that continues to recognize size as one risk factor, but also more holistically incorporates other risk categories. in implementing this legislation, we should consider tailoring regulation further to take into account large banks ’ complexity and interconnectedness. of course, the details of how we implement a tailored framework will be subject to debate, and you can expect the federal reserve to be highly engaged in the public feedback process. implementing the economic growth, regulatory relief, and consumer protection act is a high priority for the board, and we look forward to hearing the range of views as we make progress. the views i express here are my own and not necessarily those of the board of governors of the federal reserve system. pending research to be published by federal reserve board staff in the near future suggests that an increase in bank stress results in poorer economic performance in a way that scales with bank size. put another way, staff estimate that stress at a single bank with $ 250 billion in deposits would result in roughly an 84 percent decline in quarterly gdp growth, while stress among five banks each with $ 50 billion in deposits would result in roughly a 24 percent decline in quarterly gdp growth. although both scenarios have $ 250 billion in total failed deposits, the negative impact is greater when the largest bank is stressed. 5 / 5 bis central bankers'speeches

, businesses will probably be reluctant to undertake new projects in the absence of a substantial improvement in the outlook for sales and profitability and a lifting of uncertainty. and tight credit conditions – especially for see perry and schultze, " was this recession different? " p. 149. for related evidence, see paul beaudry and gary koop ( 1993 ), " do recessions permanently change output? " journal of monetary economics, vol. 31 ( april ), pp. 149 - 63 ; and sichel, " inventories and the three phases of the business cycle. " commercial construction – likely will be a significant negative force. but here too, confidence could bounce back more rapidly, and if credit conditions were to ease appreciably, businesses might move ahead quickly with capital spending projects that had been postponed during the recession. exports were an important source of strength for the u. s. economy in recent years. however, the global nature of the current economic downturn means that they are unlikely to provide much support for domestic production going forward. activity in foreign economies, taken together, contracted in the fourth quarter at a rapid pace – similar to that in the united states. recent indicators point to equally dismal outcomes in the first quarter and, although there have been a few signs of stabilization, have yet to send a clear signal that the global economy has hit bottom. the intensification of financial turmoil was global, and many of our trading partners are also facing constraints on credit availability. although the recovery in the u. s. economy is likely to be gradual in its early stages, it should gain momentum over time. as credit markets improve, the accommodative stance of monetary policy will show through more clearly. and a rebound in confidence about the future should help spur demand. as demand strengthens and financial markets improve, some of the adverse feedbacks should reverse and begin working to bolster activity. in time, as these forces come into play, economic growth will pick up, ultimately returning the economy to its full productive capacity and bringing the unemployment rate down to a more normal level. inflation prospects if, as i have described, the economic recovery initially follows a relatively gradual track, margins of slack in labor and product markets are likely to remain wide for a time, implying some further downward pressure on inflation. the extent of a decline in inflation, however, should be limited by the relative stability of longer - term inflation expectations. that said, there are sizable risks on both