, spread swiftly on the entire real sector of the global economy, public authorities of advanced economies took extraordinary actions to ensure financial market functioning and attenuate the financial distress. through central bank actions, low - cost liquidity was injected into the markets, while governments took extraordinary actions to provide backup capital to financial institutions and to support domestic aggregate demand. moreover, some emerging market economies, with robust economies and with an upward share to the global economy, have supported the domestic demand through their stimulating policies and have preserved their economic growth, playing an important role in mitigating the global crisis consequences. along with extraordinary measures taken to withstand the crisis effects in the short run, authorities of advanced economies and international financial institutions have been strongly committed to change the way of global financial system functioning and its regulating superstructure. many financial market regulation and supervision standards are expected to change, aiming at putting necessary boundaries to financial market dynamism and innovations, in order to ensure system ’ s stability and its resilience to various risks. in more details, the goals of these changes will be : strengthen the mechanisms that raise financial system stability ; duly orient the stimuli that determine decision - making in the financial activity and decrease procyclicality in it. changes to the regulatory and supervisory superstructure are aimed at strengthening the institutional mechanism, paying greater attention to systemic risks and global - wide financial institutions. better conditions will be set for supervisory standards convergence and the cooperation among regulatory authorities operating in different jurisdictions will be strengthened. at the same time, the role of international financial institutions will be oriented towards financial crisis management and their resources will be adapted to this end. for many reasons, which converge in ongoing processes of financial integration and economic globalization, no country can pretend to stand beyond these developments. in such a case, what at the very beginning could be perceived as a more relaxing financial environment that would provide a competitive priority, would soon leave the place to recycling of problems that were at the root of this crisis, decreased investors ’ confidence and increased financial and social costs for recovery. naturally, each country will adapt these standards to the degree of current financial system development, its composition and depth, as well as to its outlook. it is important to emphasise that these measures would be insufficient, if not accompanied by more general policies, aiming at diversifying sources that contribute to economic equilibrium growth, financing the economic agents, improving the legal framework of business development and following sound macroeconomic policies. allow me now to deal with the situation of our financial

janet l yellen : pursuing financial stability at the federal reserve speech by ms janet l yellen, vice chair of the board of governors of the federal reserve system, at the fourteenth annual international banking conference, federal reserve bank of chicago, chicago, illinois, 11 november 2011. * * * i am indebted to federal reserve board staff members rochelle edge, andrea kusko, andrew levin, and nellie liang for their assistance in preparing these remarks, which reflect my own views and not necessarily those of others in the federal reserve system. let me begin by thanking the federal reserve bank of chicago for inviting me to participate in this important conference on the role of central banks in financial stability. as you know, the dodd - frank wall street reform and consumer protection act of 2010 ( dodd - frank act ) assigned the federal reserve a central role in the new framework for achieving and maintaining financial stability. i am grateful for this opportunity to explain how we, together with other regulators, have been moving forward to fulfill our new responsibilities. the dodd - frank act instituted substantial changes to financial - sector supervision and regulation in the united states in direct response to the serious deficiencies in the regulatory framework that were revealed, all too painfully, by the financial crisis and the associated deep recession. one key change was the requirement that u. s. financial regulators take a “ macroprudential approach ” to supervision and regulation. in my remarks today, i want to describe how this approach is being put into practice at the federal reserve. i will touch on both our own regulatory and supervisory responsibilities and our responsibilities as a member of the multiagency financial stability oversight council ( fsoc ), which the dodd - frank act established to promote a more comprehensive approach to monitoring and mitigating systemic risk. i should note that an important part of putting the macroprudential approach into practice is establishing a new regulatory infrastructure, including the fsoc and its working - committee structure. in addition, individual regulatory agencies have made organizational changes needed to fulfill their new responsibilities. at the federal reserve, we have reoriented our supervision of large bank holding companies, and we have created a new office called the office of financial stability policy and research, which plays a key role in monitoring financial risks, analyzing the implications for financial stability, and identifying approaches for mitigating identified risks. overview of the macroprudential approach the explicit incorporation of macroprudential considerations into our structure for financial regulation and oversight represents a major innovation