countries in recent years. 9 accordingly, some national authorities have used macroprudential tools focused on housing, such as caps on loan - to - value ratios, to try to increase the resilience of borrowers and to indirectly strengthen the resilience of the banks and the financial system should their housing booms turn to busts. for example, policymakers in canada have not activated the ccyb in response to concerns about housing market risks, but they have lowered the maximum loan - to - value ratio for various mortgage products and capped debt - service - to - income ratios. 10 the availability of such alternative tools for limiting systemic risk may be among the factors influencing the decision to adjust, or not adjust, the ccyb in a number of countries. in this regard, it is notable that the set of macroprudential tools in the united states is limited relative to that in many other countries. 11 finally, another difference, one that is particular to the united kingdom, is the framework adopted by the u. k. financial policy committee ( fpc ) to integrate the ccyb with its structural capital requirements. specifically, under the fpc's framework, the ccyb would equal 1 percent in standard risk conditions - - but to avoid having this be a significant increase to already very high levels of capital, the fpc undertook a one - time adjustment to its other capital buffers in order to offset part of this increase. the effect of the policy is that the buffer can be varied - - both up and down - - in line with the changing risks that the banking system faces over time. this approach is an interesting deviation from the idea in the original basel discussions and the framework adopted in many other jurisdictions, in which structural capital requirements are set at levels aimed to deliver the desired level of resilience, with the ccyb raised to positive values only at times when vulnerabilities are above normal. in practice, the u. k. framework appears to have provided the fpc with additional flexibility, as it has adjusted the ccyb with evolving financial risks associated with, for example, brexit. as i examine this experience, systems similar to the united kingdom's, where the ccyb is positive during normal times, may allow policymakers to react more quickly to economic, financial, or even geopolitical shocks that occur amid otherwise normal conditions, without relying on the slow - moving credit aggregates contemplated in the original

basel proposal. moreover, this setting of the ccyb permits more gradual adjustments in the ccyb, especially in periods with a high degree of uncertainty about the level of financial vulnerabilities. another possible benefit of a system that has additional flexibility is the ability to coordinate the setting of the ccyb with the setting of monetary policy in situations where such coordination is valuable. at the same time, i would not expect such situations to be the norm, as the objectives and governance of monetary policy and macroprudential policies are separate for good reasons. conclusion in the united states, we have built a substantially safer financial system by focusing on using structural tools that confer through - the - cycle resilience. with that construction work largely behind us, attention naturally turns to the set of time - varying financial regulations - - particularly the ccyb. 5 / 6 bis central bankers'speeches the overall capital framework in the united states has been designed to ensure high capital levels without having to activate the ccyb, with the implication being that the bar for activation would be a high one ; but, as a result, much of the time there would not be any buffer to reduce if conditions were to precipitously deteriorate. the united kingdom's approach to setting the ccyb also relies on having a high overall level of capital during normal times, but, by " swapping " some portion of static capital for ccyb in reaching that high capital level during normal times, and thus making some of that capital part of a releasable buffer, u. k. policymakers have built in more flexibility to move buffers down in times of stress. other countries provide additional " data points " in terms of possible ways of approaching the ccyb. with the ccyb in active use around the world, i am confident that the academic and policy communities will learn a great deal about how best to use this new tool to build a more resilient financial system. 1 these remarks represent my own views, which do not necessarily represent those of the federal reserve board or the federal open market committee. 2 see allan h. meltzer ( 2000 ), “ the shadow open market committee : origins and operations, " journal of financial services research, vol. 18 ( december ), pp. 119 – 28 ( quoted text on p. 120 ). 3 see board of governors of the federal reserve system ( 2019 ), “ federal reserve issues fomc