last decade. rulemaking entails publishing rationales for agency action and seeking public input. these procedural requirements serve an important purpose and ultimately promote better agency decisionmaking. one of the most effective tools we have for doing so is the use of public board meetings to address matters of significant public interest. my hope is that material items on the reform agenda will continue to be handled through public meetings that give greater visibility and insight into the thinking and rationales of different policymakers. closing thoughts i will conclude today's remarks by thanking all of our participants for joining us in dallas and contributing to these important discussions. the elements that facilitate accountability parallel those elements necessary for effective reform - a deep understanding of facts, a careful identification of how elements of the banking system perform over time and during stress, and a commitment to take ownership of identified problems with targeted reforms that are commensurate with the underlying risks. as we engage in a review of our regulatory framework for liquidity and more broadly, these elements should serve as a guide to understanding the past and help us chart a path forward. 1 the views expressed here are my own and are not necessarily those of my colleagues on the federal reserve board or the federal open market committee. 2 federal reserve system, request for comment, " expansion of fedwire® funds service and national settlement service operating hours, " 89 fed. reg. 39, 613 ( may 9, 2024 ). 3 the comment period on this proposal has been extended until september 6, 2024. federal reserve system, request for comment ; extension of comment period, " expanded hours for fedwire® funds service and national settlement service ( pdf ) " ( june 21, 2024 ). 4 michelle w. bowman, " bank liquidity, regulation, and the fed's role as lender of last resort " ( speech at the roundtable on the lender of last resort : the 2023 banking crisis and covid, sponsored by the committee on capital markets regulation, washington, d. c., april 3, 2024 ). 5 the federal housing finance administration ( fhfa ) published a request for input on the core mission activities and mission achievement of the fhlbs. as noted in the request, the fhfa had previously found in the fhlbank system at 100 : focusing on the future report that fhlbs should increase their support for housing and community 8 / 9 bis - central bankers'speeches development. see fhfa, " request

originating abroad, such as a foreign recession. first, this shock affects the united states through direct trade links, lowering demand for u. s. exports and, thus, lowering u. s. gdp. second, the foreign recession leads to lower interest rates abroad and, other things being equal, raises the value of the dollar, which in turn lowers u. s. exports and boosts u. s. imports. the dollar appreciation also puts downward pressure on u. s. import prices and, thereby, inflation. the extent to which foreign worries lead to safe - haven flows may add to the dollar ’ s strength. finally, there is contagion to u. s financial markets. let me first elaborate on the exchange rate channel i just mentioned. the traditional determinants of exchange rates — that is, differentials in expected rates of return — apply to the united states as to other countries. but the u. s. economy is different because of the special role of u. s. government bonds as global safe assets. as a consequence, an adverse foreign shock that damped the demand for risky assets would be expected to trigger safe - haven flows that boost the dollar, weighing on the u. s. economy. 4 the spillover of risk aversion to u. s. markets might well also push down equity prices and widen 1 / 4 bis central bankers'speeches corporate credit spreads, adding to the contractionary pressures. however, the same safe - haven flows into treasury securities would cause u. s. long - term yields to fall, mitigating these adverse effects on domestic demand and activity. 5 historical experience let us consider some historical examples of the effect of adverse foreign shocks on the u. s. economy. the mexican peso crisis of 1994 and ‘ 95 and the asian financial crisis of 1997 through ‘ 98 resulted in substantial hits to aggregate emerging market economy ( eme ) growth, but they had fairly muted effects on u. s. growth. 6 in part, this limited response in previous decades reflected the smaller share of the emes in the global economy and, as a related matter, in u. s. trade. furthermore, the weight of emes in the global financial system was lighter in previous decades, so their crises were less disruptive to global markets. 7 finally, even back then, the safe - haven flows into dollar assets that i highlighted earlier were an important mitigating factor, pushing down u. s. long - term yields