housing market will likely involve shifting some of the burden of adjustment from some parties to others. i greatly appreciate the leadership that the senate banking committee has shown on the profound challenges facing the housing market. for its part, the federal reserve will continue to use its policy tools to support the economic recovery and carry out its dual mandate to foster maximum employment in the context of price stability. in its supervisory capacity, the federal reserve will continue to encourage lenders to find ways to maintain prudent lending standards while serving creditworthy borrowers. thank you again for inviting me to appear before you today. i would be happy to answer any questions you may have. bis central bankers ’ speeches

that helped spread the crisis, the response to the crisis needed to be global as well. and many of the responses were indeed global – or at least were quite similar across various jurisdictions. everyone was reacting to the same types of problems, but the similarities also reflected a high degree of global consultation and collaboration. we can see this in the actions of many central banks. beginning in late 2007, central banks generally reacted to funding problems and incipient runs with similar expansions of their liquidity facilities. they lengthened lending maturities, in many cases broadened acceptable collateral, and in several instances initiated new auction techniques for distributing liquidity to overcome the inertia from stigma. central banks were in constant contact through this period, although they arrived at many of these actions separately. however, we did explicitly coordinate to address problems in dollar funding markets. the federal reserve entered into foreign exchange swaps with a number of other central banks to make dollar funding available to foreign banks in their own countries. by doing so, we reduced the pressure on dollar funding markets here at home. governments also reacted similarly when in late 2008 the turmoil deepened and many countries saw a need to provide broad support to their banking systems. the rescue plans in different countries contain similar elements : expanded deposit insurance, guarantees on nondeposit liabilities, and capital injections. although most countries wound up in a similar place, the process was not well coordinated, with action by one country sometimes forcing responses by others. many countries also took measures to deal with financial distress at systemically important firms. efforts in this area were much messier. the failure of lehman brothers highlighted the lack of a framework that would allow for the orderly resolution of a systemically important nonbank financial institution in the united states. even where formal crisis - management frameworks existed, such as within the european union, they were not always used in the heat of the crisis. the reality is that the resolution of failing firms is still a national responsibility, even for institutions that operate globally. early on in the crisis, authorities recognized that addressing the deficiencies made apparent by the crisis required an international effort. many of those deficiencies – for example, in bank capital and liquidity requirements and in accounting systems – were embodied in internationally agreed regulations, standards, and codes of conduct. addressing them would require working through global bodies of national and international standard setters and they would require broad agreement among national authorities. the financial stability forum ( now renamed the financial stability board )