( eds. ), nber macroeconomics annual 2010, vol. 25, university of chicago press, pp. 59 – 112 ; and christiano, l., eichenbaum, m. and rebelo, s. ( 2011 ), “ when is the government spending multiplier large? ”, journal of political economy, vol. 119, no 1, pp. 78 – 121. 4 de jong, j., ferdinandusse, m., funda, j. and vetlov, i. ( 2017 ), “ the effect of public investment in europe : a model - based assessment ”, working paper series, no 2021, ecb, february. 5 there was an exemption clause for the deficit limits in the event of a severe recession. 6 european fiscal board ( 2019 ), assessment of eu fiscal rules with a focus on the six and two - pack legislation, 11 september. 7 kiley, m. and roberts, j. ( 2017 ), “ monetary policy in a low interest rate world ”, brookings papers on economic activity. 4 / 4 bis central bankers'speeches

elizabeth a duke : credit availability and prudent lending standards testimony of ms elizabeth a duke, member of the board of governors of the us federal reserve system, before the committee on financial services, us house of representatives, washington dc, 25 march 2009. the original speech, which contains various links to the documents mentioned, can be found on the us federal reserve system ’ s website. * * * chairman frank, ranking member bachus and members of the committee, i am pleased to appear today to discuss several issues related to the state of the banking system. first, i will discuss the condition of the banking system, credit conditions, and bank underwriting standards. then i will describe federal reserve activities to enhance liquidity in financial markets and improve conditions in financial markets. finally, i will discuss the federal reserve's efforts to ensure the overall safety and soundness of the banking system as well as promote credit availability. as you are well aware, the federal reserve has taken significant steps to improve financial market conditions, and has worked with the treasury and other bank and thrift supervisors to address issues at u. s. banking organizations. we remain attentive to the need for banks to remain in sound financial condition while at the same time to continue lending prudently to creditworthy borrowers. fortunately, many banks continue to lend in this environment, but with the shutdown of most securitization markets and the evaporation of many types of nonbank credit, it is that much more important right now for the u. s. banking system to be able to carry out its credit intermediation function. background the federal reserve has supervisory and regulatory authority for bank holding companies, state - chartered banks that are members of the federal reserve system ( state member banks ), and certain other financial institutions and activities. we work with other federal and state supervisory authorities to ensure the safety and soundness of the banking industry, foster the stability of the financial system, and provide for fair and equitable treatment of consumers in their financial transactions. the federal reserve is not the primary federal supervisor for the majority of commercial bank assets. rather, it is the consolidated supervisor of bank holding companies, including financial holding companies, and conducts inspections of those institutions. the primary purpose of inspections is to ensure that the holding company and its nonbank subsidiaries do not pose a threat to the soundness of the company's depository institutions. in fulfilling this role, the federal reserve is required to rely to the full