financial resilience can also play a crucial role in mitigating the adverse effects of cyberattacks. cyberattacks erode the confidence that investors and institutions have in each other and in the financial sector. while strong capital and liquidity positions will not, by themselves, prevent an intrusion, they leave the affected institution in a better position to rejoin the system once the attack is resolved and, most importantly, promote confidence among its counterparties. moreover, the effects of chaotic markets may impact other institutions that suddenly face losses whose magnitudes might be hard to judge. well capitalized, - 10 highly liquid, and well managed institutions will be best positioned to manage such difficult circumstances. conclusion let me conclude by summarizing how we approach the set of issues i have discussed — including systemwide monitoring, cre and private credit developments, and cyber risks — in our financial stability work. we cannot know the next shock that will test the resilience of the financial system. that is why we focus on the resilience of the financial sector in our regulatory and supervisory work concerning banking organizations and in our engagement with other regulators. we also continuously monitor the financial system and regularly report our assessments in the financial stability report. such public communication contributes to the transparency and accountability of our efforts. i hope it also stimulates a public discussion of vulnerabilities to financial stability, as my colleagues and i value the range of views on these issues held across researchers, financial market participants, and the broader public. for this reason, i look forward to our discussion. again, thank you to the hutchins center and the brookings institution for hosting me today. may 07, 2024 figure 1 business and household debt - to - gdp 1. 1 ratio ratio quarterly 1. 0 0. 9 0. 9 0. 8 0. 8 0. 7 q4 0. 6 0. 4 0. 7 0. 6 nonfinancial business ( right scale ) household ( left scale ) 0. 5 0. 3 1. 0 0. 5 0. 4 note : the shaded bars indicate periods of business recession as defined by the national bureau of economic research : january 1980 - july 1980, july 1981 - november 1982, july 1990 - march 1991, march 2001 - november 2001, december 2007 - june 2009, and february 2020 - april 2020. gdp is gross domestic product. source : federal reserve board staff calculations based on bureau of economic analysis, national income and product accounts,

pre - federal reserve see ben s. bernanke ( 2012 ), “ some reflections on the crisis and the policy response, ” speech delivered at “ rethinking finance, ” a conference sponsored by the russell sage foundation and century foundation, new york, april 13. for the classic discussion of financial panics and the appropriate central bank response, see walter bagehot ( [ 1873 ] 1897 ), lombard street : a description of the money market ( new york : charles scribner ’ s sons ). information on the centennial of the federal reserve system is available at www. federalreserve. gov / aboutthefed / centennial / about. htm. the panic of 1907 is discussed in a number of sources, including o. m. w. sprague ( 1910 ), a history of crises under the national banking system ( pdf ), national monetary commission ( washington : u. s. government printing office ), and, with a focus on its monetary consequences, milton friedman and anna jacobson schwartz ( 1963 ), a monetary history of the united states, 1867 – 1960 ( princeton, n. j. : princeton university press ). an accessible discussion of the episode, from which this speech draws heavily, can be found in jon r. moen and ellis w. tallman ( 1990 ), “ lessons from the panic of 1907 ( pdf ), ” federal reserve bank of atlanta, economic review, may / june, pp. 2 – 13. see charles w. calomiris and gary gorton ( 1991 ), “ the origins of banking panics : models, facts, and bank regulation, ” in r. glenn hubbard, ed., financial markets and financial crises ( chicago : university of chicago press ), pp. 109 – 74. bis central bankers ’ speeches panics, money markets were tight when the panic struck in october, reflecting the strong seasonal demand for credit associated with the harvesting and shipment of crops. the immediate trigger of the panic was a failed effort by a group of speculators to corner the stock of the united copper company. the main perpetrators of the failed scheme, f. augustus heinze and c. f. morse, had extensive connections with a number of leading financial institutions in new york city. when the news of the failed speculation broke, depositor fears about the health of those institutions led to a series of runs on banks, including a bank at which heinze served as president. to try to restore