up excessive credit during an economic expansion. limiting pro - cyclicality means limiting both the highs and lows of a credit cycle. along with many other jurisdictions, the united states adopted a countercyclical capital buffer ( ccyb ) to address the issue. the u. s. ccyb is a capital buffer that ranges from zero percent to 2. 5 percent of covered institutions ’ risk - weighted assets. domestic regulators have discretion to switch the ccyb on or off anywhere within that range in order to prevent or mitigate the overheating of credit markets under their jurisdiction. in setting the buffer, the federal reserve takes into account, among other things, leverage in the financial sector, leverage in the nonfinancial sector, maturity and liquidity transformation in the financial sector, and asset valuation pressures. notably, the ccyb is not calibrated bank - by - bank and is not calibrated asset - class - by - asset - class. rather, regulators set the buffer based on their perception of the aggregate domestic credit cycle, whether it ’ s too hot, too cold, or just right. under the board ’ s current policy, we would activate the ccyb based on “ when systemic vulnerabilities are meaningfully above normal. ” based on this policy, the ccyb is currently set at zero percent in the united states but has been turned on in france, hong kong, sweden, the united kingdom, and norway. it is worth noting that, in the united kingdom, the ccyb is set equal to a positive level — 1 percent — in normal times. as a result, their buffer can be adjusted upward or downward based on the perceived risks of the time - varying credit cycle. as i have recently said, i see real merit in exploring the u. k. approach as a tool to promote financial stability. - 10 conclusion let me conclude by offering a few thoughts on three research topics that fall squarely in the intersection of law and macroeconomics. central bank mandates first, while international agreements such as basel iii demonstrate that the international regulatory community has agreed on the high - level systematic changes and developed similar perspectives following the crisis, national governments gave different regulatory powers — in both degree and scope — to their central banks in pursuit of the new post - crisis consensus. 5 in the united states, congress did not change the federal reserve ’ s dual mandate but did provide new responsibilities to promote financial stability. there was no

mr ferguson gives a 20 - year overview of economic developments in latin america speech by mr roger w ferguson, jr, member of the board of governors of the us federal reserve system, to the florida international bankers association in miami on 11 / 02 / 99. thank you very much for inviting me to join you this evening here in miami. it is a pleasure to become a member of the roster of federal reserve governors who have addressed this joint meeting of the florida international bankers association and the miami bond club. my theme this evening will mirror the fact that international banking has grown significantly in florida in the more than 20 years that have elapsed since the passage of the florida international banking act. many of you in the audience represent institutions that are active in trade finance throughout the hemisphere, and there is a natural strong link between florida and latin america. similarly, about 20 years ago i studied latin american economic development with albert o hirschman, one of the great development economists of our time. therefore, the topic i would like to discuss this evening is what has worked, and apparently has not worked, in latin america in the last 20 years or so. the main message is that, after the 1980s debt crisis, many latin american countries embarked on a path of greater economic freedom, lessened government intervention in markets and sounder policies. those policies provided the basis for heightened economic dynamism and growth, and thereby led to significant benefits for their citizens, including higher incomes, lower inflation, and a wider range of economic opportunities. in view of my audience today, i should also mention that, partly as a consequence of improved and more market - friendly policies, many of latin america ’ s banking systems are endeavoring to become more efficient, more stable, and better integrated with global financial markets. as a result, latin american banks should become better able to support the process of stable, non - inflationary growth in the future. the current economic and financial problems in brazil should, if anything, reinforce the importance of pursuing sound fiscal and monetary policies and improvements in the underlying institutions that support economic activity. background twenty years ago, or by the end of the 1970s, latin america was on the verge of moving from a phase of unsustainable economic activity – based on high domestic consumption, heavy borrowing from abroad, unsustainable currency levels, and excessive intervention by government in the economy – into a decade of lost growth and lost opportunities known as the debt crisis. as the 1980s began, latin american countries