william j mcdonough : bank supervision and credit standards under basel ii – perspectives for smes remarks by mr william j mcdonough, president and chief executive officer of the federal reserve bank of new york and chairman of the basel committee on banking supervision, at the gurzenich koln, cologne, germany, 25 april 2002. * * * introduction graf von hohenthal, herr dr. breuer, members of the panel, “ meine damen und herren … ” it is an honor to join your discussion on the efforts of the basel committee on banking supervision to ensure that the international rules on capital adequacy serve the needs of twenty - first century banking effectively. what makes this a special privilege for me is the opportunity to meet so many entrepreneurs, owners of small and medium - sized businesses, and others who make up the real engines of the economy. your interest in the work of the basel committee reminds us all that we must look beyond the banking sector to ensure that the foundation we lay provides for the stability and growth of the entire economy. i have long emphasized that the role of supervisors is not to hinder growth or profit, but rather to promote the responsible pursuit of opportunity and innovation. as we improve the rules for bank capital, we must certainly keep this mandate in mind and consider the effects that changes to those rules may have on the economy. like you, i recognize the need for small and medium - sized enterprises to retain access to credit at reasonable and fair prices. access to credit matters not just because credit can enable small businesses to grow, but more because small businesses enable the whole economy to grow. this is true not just for the “ mittelstand ” in germany, but also of entrepreneurial ventures around the world. in the united states, for example, small businesses traditionally create the majority of new jobs, invent a large proportion of all new technologies, and are responsible for nearly 40 % of our gross national product. preview i know that you are deeply interested in the steps that the basel committee is taking to ensure that small businesses continue to enjoy fair and open access to credit, and i am pleased to share with you the good progress that the committee has achieved since the release of the second consultative paper in january 2001. i ’ ll begin with an overview of the importance of regulatory capital to the stability of the banking systems – and that of the economy – and how the committee ’ s current efforts will reinforce that stability. second, i ’

william c dudley : the economic outlook and the fed's balance sheet – the issue of " how " versus " when " remarks by mr william c dudley, president and chief executive officer of the federal reserve bank of new york, at the association for a better new york breakfast meeting, new york, 29 july 2009. * * * it is a pleasure to have the opportunity to speak here at the association for a better new york. this group has obviously been very successful. new york today is a far different and vastly superior place from what i found when i first arrived as a freshman at columbia university in 1970. today, i ’ d like to accomplish two tasks. first, i ’ ll comment briefly on the economy and the economic outlook – where we have been and where we may be going. i ’ m going to suggest that the balance of risks is still tilted toward weakness in growth and employment and not toward higher inflation. i will also argue that it is premature to talk about “ when ” we are going to exit from this period of unusual policy accommodation. second, i will talk about the impact of the federal reserve ’ s lending facilities and purchase programs on the size of the fed ’ s balance sheet. i ’ ll explain why an expanded balance sheet does not constrain our ability to exit from the current degree of policy accommodation. in other words, contrary to what is sometimes argued, it is not the case that our expanded balance sheet will inevitably prove inflationary. it is important that this critical issue be well understood. the public must be absolutely confident that the fed can meet its monetary policy objectives of low and stable inflation and sustainable economic growth. before i begin to get into these issues in earnest, let me note that, as always, the views i put forward today are my own and do not necessarily reflect the position of the federal open market committee ( fomc ) or the federal reserve system. turning first to the outlook, the economic contraction appears to be waning and it seems likely that we will see moderate growth in the second half of the year. the economy should be boosted by three factors : 1 ) a modest recovery in housing activity and motor vehicle sales ; 2 ) the impact of the fiscal stimulus on domestic demand ; and 3 ) a sharp swing in the pace of inventory investment. in fact, if the inventory swing were concentrated in a particular quarter, we could see fairly rapid growth for a brief period. regardless of the precise timing, there are a number of factors