telephone patent to western union for only $ 100, 000, but was turned down. similarly, marconi initially overlooked the radio ’ s value as a public broadcast medium, instead believing its principal application would be in the transmission of point - to - point messages, such as ship - to - ship, where communication by wire was infeasible. a second source of technological uncertainty reflects the possibility that an innovation ’ s full potential may be realized only after extensive improvements, or after complementary innovations in other fields of science. according to charles townes, a nobel prize winner for his work on the laser, the attorneys for bell labs initially refused, in the late 1960s, to patent the laser because they believed it had no applications in the field of telecommunications. only in the 1980s, after extensive improvements in fiber optics technology, did the laser ’ s importance for telecommunications become apparent. it ’ s not hard to find examples of such uncertainties within the financial services industry. the evolution of the over - the - counter derivatives market over the past decade has been nothing less than spectacular. but as the theoretical underpinnings of financial arbitrage were being published in the academic journals in the late 1950s, few observers could have predicted how the scholars ’ insights would eventually revolutionize global financial markets. not only were additional theoretical and empirical research necessary, but, in addition, several generations of advances in computer and communications technologies were necessary to make these concepts computationally practicable. all these examples, and more, suggest, that if we dramatically change the rules now about banking and commerce, with what is great uncertainty about future synergies between finance and nonfinance, we may well end up doing more harm than good. and, as with all rule changes by government, we are likely to find it impossible to correct our errors promptly, if at all. modifications of such a fundamental structural rule as the separation of banking and commerce accordingly should proceed at a deliberate pace in order to test the response of markets and technological innovations to the altered rules in the years ahead. the need for caution and humility with respect to our ability to predict the future is highly relevant for how banking supervision should evolve. as i proposed to this audience last year, regulators are beginning to understand that the supervision of a financial institution is, of necessity, a continually evolving process reflecting the continually changing financial landscape. increasingly, supervisory techniques and requirements try to harness both the new technologies and market incentives to improve oversight while reducing regulatory burden, burden

jerome h powell : confirmation hearing testimony by mr jerome h powell, member of the board of governors of the federal reserve system, before the committee on banking, housing, and urban affairs, us senate, washington dc, 28 november 2017. * * * chairman crapo, ranking member brown, and other members of the committee, thank you for expeditiously scheduling this hearing and providing me the opportunity to appear before you today. i would also like to express my gratitude to president trump for the confidence he has shown by nominating me to serve as chairman of the board of governors of the federal reserve system. the federal reserve has had a productive relationship with this committee over the years, and, if you and your colleagues see fit to confirm me, i look forward to working closely with you in the years ahead. before i continue, i would like to introduce my wife, elissa, who is sitting behind me. i would not be here today without her unstinting love, support, and wise counsel. as you know, i have served as a member of the board of governors and the federal open market committee ( fomc ) for more than five years, contributing in a variety of capacities, including most recently as chairman of the board ’ s committee on supervision and regulation. my views on a wide range of monetary policy and regulatory issues are on the public record in speeches and testimonies during my service at the fed. the congress established the federal reserve more than a century ago to provide a safer and more flexible monetary and financial system. and, almost exactly 40 years ago, it assigned us monetary policy goals : maximum employment, meaning people who want to work either have a job or are likely to find one fairly quickly ; and price stability, meaning inflation is low and stable enough that it need not figure into households ’ and businesses ’ economic decisions. i have had the great privilege of serving under chairman bernanke and chair yellen, and, like them, i will do everything in my power to achieve those goals while preserving the federal reserve ’ s independent and nonpartisan status that is so vital to their pursuit. in our democracy, transparency and accountability must accompany that independence. we are transparent and accountable in many ways. among them, we affirm our numerical inflation objective annually and publish our economic and interest rate projections quarterly. and, since 2011, the chairman has conducted regular news conferences to explain the fomc ’ s thinking. additionally, we are accountable to the people ’