its terms that the losses of any financial company placed into fdic receivership be borne by the private sector stockholders and creditors of the firm. single point of entry can work without exposing taxpayers to loss. although the fdic has authority to provide temporary liquidity to a failed firm, any costs incurred by the fdic in resolving the firm must be recovered completely from either the assets of the firm or assessments on the financial industry. the failed firm ’ s investors, and, if necessary, other large financial firms, will bear any costs. that is “ bail - in, ” not “ bailout. ” another strand of criticism argues that reforms do not go far enough and calls for more activity limits on banking firms, for limiting their size or systemic footprint, or for simply breaking them up. activity limits some have urged the resurrection of the 1930s - era glass - steagall prohibitions – that is, preventing the affiliation of commercial banks with investment banks. this proposal seems neither directly related to the causes of the financial crisis, nor likely to help end too big to fail. the systemic run that led to the financial crisis began with traditional investment banks, such as bear stearns and lehman brothers. the activities of these firms were, of course, not affected by the repeal of glass - steagall. commercial banking firms now engage in activities traditionally associated with investment banking, such as securities underwriting. the combination of these activities under a single corporate umbrella did not contribute meaningfully to the financial crisis. in my view, losses at the commercial banks were more importantly a consequence of bad credit underwriting and the failure of risk management systems to keep up with innovation and the explosive growth in securitization – developments that were not fundamentally driven by the repeal of glass - steagall. size limits there are also calls to further limit the size or systemic footprint of financial firms. limits of this nature require, and deserve, careful analysis. two provisions of existing law already impose size caps on u. s. banking firms. one limits acquisitions of banks by any bank holding company that controls more than 10 percent of the total insured deposits in the united states, and a second, added by dodd - frank, forbids acquisitions by any financial firm that controls more than 10 percent of the total liabilities of financial firms in the united states. in addition, dodd - frank added a new requirement that banking regulators consider “ risk to the stability of the u. s. banking or financial system ” in evaluating

lisa d cook : important questions for economic research speech by ms lisa d cook, member of the board of governors of the federal reserve system, at the carroll round keynote speech, georgetown university mcdonough school of business, washington dc, 21 april 2023. * * * good evening. thank you for the invitation to speak at the carroll round this year. 1 economics, like any other discipline, has its own established canon and set of rules and models. but it is also constantly evolving, growing, and changing shape. new approaches and methods are developed. unique forces arise and long - established behaviors can change - - as we have seen over the past three years, and even the past decade. there will always be unasked questions and new trails to blaze. and, as in any field, the people who make up the profession lie at the heart of its growth and progress. it is a pleasure to be here today among such a talented group of future economists. your research reflects everything that is exciting about the discipline. because you have interesting theses. because you have used an impressive variety of data sets and models. and because you have a perspective that is unique to your generation and experiences. as you know, i was a professor of economics and international relations at michigan state university for nearly two decades before joining the board of governors. among my favorite courses to teach were undergraduate research courses. it was magical to see the novel ways that students brought new ideas, literature, models, methods, and data to the most pressing problems of the day. i see some of that magic in the research represented here this evening. in keeping with that spirit of inquiry, i would like to talk today about some of the open questions i see for understanding the economic outlook and for setting monetary policy. i will also focus on some of the data sources i find valuable for answering those questions. inflation for monetary policy, the foremost questions currently are about the inflation process. the pandemic - related economic shutdown created rapid shifts in demand, which continued through the reopening process and reflected people's wants and needs during that time. for instance, there was a sharp move away from in - person services and toward goods. this was coupled with disruptions to supply, both in global supply chains and the labor force. russia's invasion of ukraine last year further restricted access to commodities, and the subsequent surge in energy prices drove a spike in consumer price inflation to a peak in mid - 2022,