for the recovery. 1 indeed, interest - rate and credit - sensitive sectors — business spending, home sales, auto sales, and other “ big - ticket ” items — have helped fuel that recovery. this spending was supported by our timely and forceful moves to cut the federal funds rate to its effective lower bound, restore market functioning, and provide emergency support to households and businesses through 13 ( 3 ) emergency lending facilities. which leads me to the banking industry. for monetary policy to fully support main street, we need a well - capitalized, stable banking system that is lending to creditworthy households and businesses. since the global financial crisis ( gfc ), the federal reserve has focused on building the resiliency of banks so that they would be a source of strength during the next downturn. thus far, that plan has borne a great deal of fruit. as the crisis intensified in early march, banks stepped into the breach and met the massive demands for cash from businesses that drew on their preexisting credit lines. banks also funded the bulk of the more than $ 500 billion in paycheck protection program ( ppp ) loans. according to our weekly bank credit data, commercial and industrial loans increased $ 715 billion between the 1 / 4 bis central bankers'speeches week of february 26th and their peak on may 13th. 2 for millions of struggling households, banks have agreed to forbear interest and principal payments on their loans. in addition, through september, banks absorbed more than $ 1. 2 trillion of central bank reserves and received about $ 2. 5 trillion of core deposits from investors who sought the safe haven of the u. s. dollar and insured bank accounts. as supervisors, we recognized that these actions strained the balance - sheet capacity of banks and so have taken a number of steps to allow them to continue to support their customers during this unprecedented time. a number of those steps — such as encouraging banks to work with their customers until the emergency subsides — are consistent with what we do whenever there is a natural disaster that disrupts normal commerce. but the covid event has affected the entire country at the same time, requiring a broad set of extraordinary actions. for instance, we have temporarily exempted reserves and treasury securities from the supplementary leverage ratio so that banks do not become constrained by growing treasury issuance and central bank reserves and can support businesses and households. 3 more broadly, we have reintroduced and added numerous funding facilities through our 13 ( 3 ) authority to

randal k quarles : the importance of transparency, accountability, and fairness in regulation speech ( via webcast ) by mr randal k quarles, vice chairman for supervision of the board of governors of the federal reserve system, at the hoover institution, stanford, 14 october 2020. * * * i want to thank john taylor and the hoover institution for inviting me to speak today. i will start with some brief remarks about the current economic situation and monetary policy and then turn to the actions that the federal reserve has taken this year to help ensure that the banking system remains a source of strength during the recovery from the covid event, the term i use for the complex set of responses in both the private and public sectors to the outbreak of covid19. i will close with some thoughts on nonbank financial institutions and international coordination. although the covid event put the u. s. economy in a deep hole, the recovery since the economy began reopening in may has been stronger than almost any forecaster predicted back in the spring. spurred in part by record fiscal stimulus, both business and household spending appear to have bounced back significantly through the third quarter, and we have regained about half of the jobs lost in march and april. i attribute a good portion of that strength to the inherent dynamism and flexibility of the american economy. although the covid event continues to stress businesses, many businesses adjusted their operations to remain open, and applications for new businesses surged over the summer. meanwhile, better treatments and more - targeted containment measures focused on protecting the most vulnerable have resulted in falling rates of hospitalization and mortality. therefore, i am optimistic that the recovery from the covid event will continue to be robust. of course, while we ’ re doing better than expected, we still have a ways to go. the labor market remains deeply depressed, and employment is far short of the federal reserve ’ s maximum employment goal. we are also keenly aware that the harm from higher unemployment has fallen even more than usual on those low - income households least able to bear it. some businesses, particularly those in high - contact and personal - service industries, largely have been left out of the recovery. inflation is well below our 2 percent longer - run goal, and some measures of inflation expectations have ticked down. therefore, at the september federal open market committee ( fomc ) meeting, i voted in favor of the new and clearer forward guidance for monetary policy because it will provide additional support