policy challenges. so it makes sense for us to remain open minded as we assess current practices and consider ideas that could potentially enhance our ability to deliver on the goals the congress has assigned us. for this reason, my colleagues and i do not want to preempt or to predict our ultimate findings. what i can say is that any refinements or more material changes to our framework that we might make will be aimed solely at enhancing our ability to achieve and sustain our dual - mandate objectives in the world we live in today. - 11 thank you very much for your time and attention. i trust that today ’ s conference will provide stimulating discussion of issues that are central to our review. - 12 references adam, klaus, and roberto m. billi ( 2007 ). “ discretionary monetary policy and the zero lower bound on nominal interest rates, ” journal of monetary economics, vol. 54 ( april ), pp. 728 – 52. bank for international settlements ( 2017 ). 87th annual report. basel, switzerland : bis, june, https : / / www. bis. org / publ / arpdf / ar2017e. pdf. berg, claes, and lars jonung ( 1999 ). “ pioneering price level targeting : the swedish experience 1931 – 1937, ” journal of monetary economics, vol. 43 ( june ), pp. 525 – 51. bernanke, ben s. ( 2007 ). “ federal reserve communications, ” speech delivered at the cato institute 25th annual monetary conference, washington, november 14, https : / / www. federalreserve. gov / newsevents / speech / bernanke20071114a. htm. — — — ( 2017 ). “ temporary price - level targeting : an alternative framework for monetary policy, ” ben bernanke ’ s blog, october 12, https : / / www. brookings. edu / blog / ben - bernanke / 2017 / 10 / 12 / temporary - price - leveltargeting - an - alternative - framework - for - monetary - policy. blanchard, olivier, eugenio cerutti, and lawrence summers ( 2015 ). “ inflation and activity — two explorations and their monetary policy implications, ” imf working paper wp / 5 / 230. washington : international monetary fund, november, https : / / www. imf. org / external / pubs / ft / wp / 2015 / w

that this is not the case, but it is a real and important risk. while i am concerned by both the timing and basis for this proposed downward revision to the interchange fee cap, i want to note two other elements of the proposal. first, the proposal includes a formula for periodic updates, under which the cap would automatically be updated based on reported data every two years. once this type of formulaic approach is adopted, i expect it will be very difficult to overcome inertia to revisit and reopen it, even if there are compelling reasons to do so. second, the proposal applies only to a subset of issuers - those with more than $ 10 billion in assets - but i expect the fee cap will continue to affect a broader range of issuers, including community banks and small credit unions. issuers of all sizes use the same payment rails, and smaller issuers will inevitably face some pricing pressure, at least indirectly, from the interchange fee cap. and while the interchange fees many smaller issuers have collected since the introduction of the interchange fee cap may have remained stable, it is difficult to determine how this compares to the aggregate costs of processing, fraud and fraud prevention, and the many other inputs for running a debit card program. it is not clear that interchange fees have kept up with the increasing expenses for many smaller issuers, including repeated reissuing of debit cards due to retail industry data breaches. ultimately, the net result of this proposal may be to simply shift costs from merchants to bank customers, and to make those costs far less transparent ( for example, if those costs are recovered through higher loan interest rates ). of course, this proposal has been published for public comment, and my colleagues and i welcome public feedback on the proposal, particularly on the impacts it may have on financial institutions, including those not directly subject to the rule. this broader context and understanding is necessary when we revise a critical piece of the u. s. payments infrastructure. climate guidance finally, on october 24, the federal reserve - in conjunction with the federal deposit insurance corporation and the office of the comptroller of the currency - published guidance directing banks'approach to climate - related financial risks. the final guidance will create confusion about supervisory expectations and will result in increased compliance cost and burden, without a commensurate improvement to the safety and soundness of financial institutions or to the financial stability of the united states. this is another regulatory action that raises questions about