like, the attitude of our staff is to always find a way, to do whatever it takes ( within the law and the scope of our responsibilities, of course ), and to not rest until we have come up with the best plan of action. that attitude was most clearly and publicly evident during the bank ’ s response to the financial crisis, where we played a critical role within the system in preventing a financial panic from turning into a world - wide depression. we continue to display that spirit each and every day at the bank. and it is that attitude, ability and esprit de corps that will no doubt allow us and the system to meet the important challenges on the road ahead. i will focus briefly on a few such challenges : the first will be on the monetary policy front. the federal reserve has engaged in a set of unconventional monetary policies in recent years. these policies have been necessary because the fomc could not ease monetary policy further by conventional means – the federal funds rate was constrained by the so - called “ zero lower bound ”. exit from these unconventional set of policies is certainly feasible – the ability to pay interest on excess reserves gives us a viable tool to manage monetary policy even with an enlarged balance sheet, and the new york fed is prepared to execute on this mission, as we always are. but we do have to be a bit humble about what we don ’ t know. there will undoubtedly be communications and operational challenges and unexpected consequences. we will need to be sufficiently agile so that we can best achieve our dual mandate of maximum sustainable employment in the context of price stability. the second challenge for us at the new york fed, and within the regulatory community more generally, will be in staying the course and implementing a regulatory regime in which no institutions are “ too big to fail ” ( tbtf ). tbtf is wrong for several reasons. it creates an unfair disparity between large and small institutions. in addition to being unfair, it creates greater risks to financial stability by encouraging greater size and complexity. we have made considerable progress toward ending tbtf – raising capital and liquidity requirements for the largest, most systemic banks – but there is a ways to go. in particular, to paraphrase former new york fed president tim geithner, while the single point of entry concept “ beats no plan ”, significant barriers to achieving a cross border resolution remain, and there are still insufficient incentives in place for firms to take corrective actions early on to prevent their failure

simon m potter : models only get you so far remarks by mr simon m potter, executive vice president of the markets group of the federal reserve bank of new york, for the federal reserve banks of atlanta and new york's first annual joint research day on quantitative tools for monitoring macroeconomic and financial conditions, federal reserve bank of new york, new york city, 22 february 2019. * * * accompanying figures of the speech. as prepared for delivery it is a pleasure to deliver the lunchtime address during the atlanta and new york fed's first annual research day on quantitative tools for monitoring macroeconomic and financial conditions. 1 my remarks will focus on some insights from the book superforecasting by philip tetlock and dan gardner, with respect to how we interpret, use, and evaluate the results from our quantitative tools. 2 if you have read the book, subtitled " the art and science of prediction, " you will probably be aware that it is much less mathematical than the discussions we have been having today, but at the same time is more complex in how it articulates the role of forecasting in good decision - making. before i continue, i should note that these remarks reflect my own personal views and not necessarily those of the new york fed or the federal reserve system. the insights in superforecasting grew out of a forecasting tournament sponsored by the intelligence advanced research projects activity ( iarpa ). in the wake of the controversy surrounding the intelligence community's assessment of the existence of weapons of mass destruction in iraq, iarpa set out to enhance the accuracy, precision, and timeliness of intelligence forecasts. 3 the federal reserve and the broader economics and financial community have, of course, had to face similarly humbling shortcomings in our failure to forecast the great recession, despite the numerous signals that were available to forecasters and policymakers prior to 2008. on this issue, it is useful to recall a quote from an unusual source on economic forecasting, the queen of the united kingdom, who in november 2008 asked, " why did nobody notice it? " we should not treat this as a rhetorical question. what are some of the underlying reasons individuals and organizations fail to predict? what should we change about our mindsets and practices to improve the chances that we " notice it " next time, whenever that may be? at the new york fed, we've made investments in response to these critical questions. we've created