not - yet - published tenets of british economist john maynard keynes. after world war ii, he recognized, again presciently, that high inflation, not contraction, posed the principal threat to the u. s. economy. and, perhaps most importantly from my perspective as fed chair, he is responsible more than any other person for the fact that the united states today has an independent central bank — a central bank able to make decisions in the long - term best interest of the economy, without regard to the political pressures of the moment. during his years on the fed board, marriner played a crucial role in two landmark accomplishments that established the modern federal reserve — the banking act of 1935, near the start of his tenure at the fed, and the federal reservetreasury accord of 1951, at the end. fdr nominated marriner to lead the fed board in 1934. he accepted on the condition that roosevelt support a restructuring of the fed, which had failed to counter the contraction gripping the nation ’ s economy. the result was the banking act of 1935, which significantly strengthened the structural independence of the federal reserve. and, symbolically important, it authorized the board to move its meetings from the treasury department to a new building — the building that now bears marriner ’ s name — on constitution avenue, across from the lincoln memorial. during world war ii, the fed effectively ceded control of monetary policy to the treasury department by agreeing to maintain a low interest rate peg on government bonds. the low rates helped the government finance the war, but after the war ended, inflation soared. it subsided for a time but, with the korean war, spiked again. in 1951, marriner led other board members in 1 / 2 bis central bankers'speeches precipitating a clean break with the peg arrangement, laying the foundation for the modern fed. the federal reserve - treasury accord of that year separated government debt management from monetary policy and freed the fed to combat high inflation and set short - term interest rates based on what was best for the economy. those are just the highlights of marriner ’ s fed career. you will learn much more in the film we are about to see. in closing, i leave you with this statement from marriner, inscribed on a plaque in the eccles building : “ the management of the central bank must be absolutely free from the dangers of control by politics and by private interests, singly or combined. " 1 1 see

topics related to the covid event, including our interim findings on the lessons learned. the findings of that report, to be finalized later this month, will drive our future work agenda. let me share a few of my own views on the key lessons learned. my first takeaway is that the global financial system entered the latest crisis more resilient than the last. although extraordinary support measures were still necessary to mitigate the impact of the covid event, the implementation of the g20 - endorsed reforms from the last crisis helped contribute to our shared resilience. basel iii, which has led to a near doubling of capital ratios since 2011, positioned banks to better absorb the macroeconomic shock. in addition, derivatives markets are safer with better transparency, central clearing, and margin requirements. my second observation from the covid event is the importance of policy flexibility for each of our jurisdictions. of course, baseline consistency across standards is necessary. but indeed, one size rarely fits all. our varied policy needs and tools make coordination even more important to achieving common goals and results. the global regulatory framework, done right, is like a tightly woven piece of fabric. it can get pulled in different directions at the same time, and it won ’ t shred or unravel. in times of crisis, the warp and woof of policy tools across the globe need to be woven tightly enough for the fabric of our financial system to withstand the stress, but flexibly enough that it will not tear. uncoordinated regulation can create flaws : gaps, fragmentation, and arbitrage opportunities, which are the types of defects the fsb strives to prevent. but excessively granular harmonization can create regulation that doesn ’ t jibe with the circumstances in a particular jurisdiction. we try to ensure that our members are weaving a strong fabric in concert. a third observation is that there are instances where policy may fail to have the desired effect. i 3 / 5 bis central bankers'speeches found banks ’ apparent reluctance to use buffers an interesting lesson from the covid event. some evidence suggests that banks may have been hesitant to use their regulatory capital buffers to meet credit demand ( despite the stated intent from supervisors that banks should use their buffers under stress ). this may be due to uncertainty regarding potential future losses or the wider market stigma that may result if a bank were to use its buffers. perhaps the extensive fiscal and monetary support provided to borrowers averted banks ’ need to