panel remarks : the fed and main street during the coronavirus pandemic - federal reserve bank of new york speech panel remarks : the fed and main street during the coronavirus pandemic " supervisory and regulatory action to support the economy and protect consumers " april 23, 2020 posted april 24, 2020 kevin stiroh, executive vice president as prepared for delivery good afternoon. thank you for your critical work and for participating in this important forum on " the fed and main street during the coronavirus pandemic. " the covid - 19 pandemic is impacting all of us – first and foremost from a health perspective, but clearly in terms of social and economic impacts. as has been discussed extensively today, this impact has fallen heavily on low - and moderate - income and minority communities across all three dimensions. i'll speak about what the federal reserve is doing to support the economy and to protect consumers and small businesses through supervisory and regulatory actions. i'll note that these action are focused on supervised banks and do not address the significant challenges faced by those households and businesses outside of the traditional banking sector and served by socially responsible capital providers such as community development financial institutions ( cdfis ), non - profits, foundations, and impact investors. before proceeding, let me emphasize that i am speaking for myself and that these view do not necessarily reflect those of the federal reserve system or the federal reserve bank of new york. provision of financial services broadly speaking, the fundamental purpose of banking is to provide financial services such as credit provision, payments, and deposit - taking to support sustained economic growth. this is true in normal times, and is even more true in the current environment. the fed has taken a number of actions to help the u. s. banking sector perform these critical functions through changes to supervision, regulation and the provision of liquidity. collectively, these steps are designed to limit the potential for financial channels to amplify the initial economic shock created by the covid - 19 virus. beginning with supervision, the federal banking agencies, in consultation with state financial regulators, are encouraging financial institutions to work with borrowers in a safe and sound manner. 1 the agencies view prudent loan modification programs as positive and proactive actions that can help both borrowers and lenders. this approach is consistent with the agencies'longstanding practice of encouraging financial institutions to assist borrowers in times of natural disaster and other extreme events. the fed has also provided information to banks on how we are

challenge of adjusting to open trade is a serious issue that has not received the degree of attention it fully deserves. this may partly reflect the fact that the burden has been borne unequally and spread out over a long time period. it also may reflect the fact that the winners from trade have often tended to have a stronger voice than those who have been the losers. 3 / 6 bis central bankers'speeches research has documented that the effects on individuals of job dislocation — including those resulting from trade — can be significant and long lasting. older workers tend to suffer larger earnings losses, and may face larger transition costs. displaced workers may not have the appropriate skills to find good jobs in other areas of the economy, including in growing export sectors. when the affected industry represents a large share of the local economy, the damage is often magnified. in this case, the burden is more widespread because wages across the community are likely to be hit as well. and, this doesn ’ t begin to capture the full human toll — including the impact on workers who have lost confidence in the future and the poorer health outcomes that occur because of increased stress. for too many individuals in the united states, for instance, the american dream has been put at risk, with parents increasingly pessimistic about whether their children will have the opportunity to do better than they did. we should find better ways to help communities that are struggling because of the effects of free trade. in the united states, we have historically experienced a high degree of geographic labor mobility — much higher than in other advanced economies. the ability to move in search of better opportunities, when possible, has helped to mitigate some of the adverse effects of trade. but, mobility has declined in the united states in recent years, implying that the adjustment costs to trade may have increased. protectionism is not the answer given these costs of global integration and more liberalized trade, what is the best path forward? protectionism can have a siren - like appeal. viewed narrowly, it may be potentially rewarding to particular segments of the economy in the short term. viewed more broadly, it would almost certainly be destructive to the economy overall in the long term. countries need to compete better, not compete less. trade barriers are a very expensive way to preserve jobs in less competitive or declining industries. they blunt opportunities in export industries and they reduce the affordability of goods and services to households. indeed, such measures often backfire, resulting in harm to workers and