importance of solid domestic fundamentals, including exchange rate flexibility, a credible monetary policy framework, sustainable fiscal policy, sufficient foreign exchange reserves, and a strong financial system. the united states has a special responsibility to keep its own house in order, given the large size of its financial markets and the u. s. dollar ’ s status as a reserve currency. indeed, the u. s. financial system was the epicenter of the global financial crisis. i believe that promoting economic growth and financial stability at home is the most important contribution the united states can make to promoting growth and stability worldwide. with that in mind, u. s. monetary policy can have a significant impact on global financial conditions, including exchange rates, and shifts in u. s. monetary policy can lead to consequential shifts in global capital flows. therefore, good communication and transparency from the federal reserve is needed. in this respect, i believe we have made a number of improvements in recent years that have facilitated smoother market adjustments to policy changes. one example is the process by which the federal reserve began the normalization of its balance sheet last year. we foreshadowed our intentions and initiated a program that was transparent in its design and ramped up only slowly. while the federal reserve has a domestic mandate set for it by the u. s. congress, it needs to be mindful of the international effects of its actions, which can have important potential consequences for the global economy and financial markets. 9 a high level of global interdependence also requires robust cooperation and effective international 6 / 8 bis central bankers'speeches institutions. to provide one example, i have traveled several times a year for the last decade to basel, switzerland, to discuss economic, monetary, and regulatory policy with foreign central bankers at the bank for international settlements ( bis ). this dialogue — supported by ongoing bilateral discussions between central banks — helps build trust, understanding, and the valuable relationships that are crucial during periods of stress. the global financial crisis put the need for a more robust and resilient financial system in stark relief. such a regime is necessary if we are to maintain the flow of credit to the real economy — both domestically and internationally — during times of stress. over the last decade, policymakers have implemented a range of reforms that have materially strengthened the banking system, including higher capital and liquidity buffers for the major international banks. 10 international coordination has been essential to the successful implementation of these reforms. banking

), 825 – 885 ; dix - carneiro, rafael ( 2018 ) “ trade and labor market adjustment : recent evidence from brazil, ” proceedings of the imf conference “ meeting globalization ’ s challenges. ” 6 dix - carneiro, rafael ( 2014 ) “ trade liberalization and labor market dynamics, ” econometrica, vol 82 ( 3 ), 825 – 7 / 8 bis central bankers'speeches 885 ; dix - carneiro, rafael ( 2018 ) “ trade and labor market adjustment : recent evidence from brazil, ” proceedings of the imf conference “ meeting globalization ’ s challenges. ” 7 this negative consequence of higher trade barriers can be illustrated most starkly by the estimates of the costs per job saved through protectionist measures. researchers that have studied this closely estimate that the costs per job saved from protectionist measures in the united states typically run into the hundreds of thousands of dollars per year. to illustrate, consider the case of import restrictions on chinese tires. the cost of a job saved was estimated at $ 900, 000 per year while the measures were in place, or more than 20 times the average worker ’ s compensation. hufbauer and lowry, “ us tire tariffs : saving few jobs at high cost ”, peterson institute for international economics, april 2012. 8 the u. s. provides some assistance to workers displaced due to trade through its trade adjustment assistance ( taa ) program. a recent academic paper finds that taa - trained workers have higher cumulative earnings ( after 10 years ) than similar workers who didn ’ t receive the training. these higher earnings reflect both higher incomes and greater labor force participation, with returns concentrated in the most disrupted regions, where workers are more likely to switch industries and move to labor markets with better opportunities in response to training. hyman, benjamin ( 2017 ) “ can displaced labor be retrained? evidence from quasi - random assignment to trade adjustment assistance, ” university of pennsylvania. 9 for further discussion, see william c. dudley, panel remarks at bank for international settlements ’ annual general meeting, june 26, 2017. 10 for further discussion, see recent committee on the global financial system ( cgfs ) report, structural changes in global banking after the crisis. 11 other committees of the bis, including the cgfs, which i chair, and the financial stability board, which the bis hosts, play an important role in analyzing international financial stability issues and developing related policy prescriptions