Yale School of Management

Federal Reserve Board Vice Chair Randal Quarles Discusses Financial Stability and Regulation

Leaders Forum

By Karen Guzman

Federal Reserve Board Vice Chair Randal Quarles, a Yale Law School alumnus, shared insights into some of the issues at the top of his agency’s agenda when he spoke with students at the Yale School of Management on May 7.

Andrew Metrick, the Janet L. Yellen Professor of Finance and Management, moderated the discussion of financial regulation and stability. Quarles’ talk was part of the Leaders Forum speakers series, which brings private and public sector leaders to Yale SOM to meet with students.

Quarles serves as vice chair for supervision at the Federal Reserve Board, overseeing regulatory and supervisory matters. He is also chair of the Financial Stability Board, an international body that monitors the global financial system.

Quarles discussed a new biannual report on financial stability that the Fed has started releasing. The report will offer greater transparency of the agency’s workings. “It provides additional insight to the public and to markets about risks and the areas we’re focused on,” he said.

Other issue that Quarles touched on included the risk still posed to the economy by leveraged loan exposure. The key aspect to consider when looking at the risk today, Quarles said, is who holds the loans.

Exposure to leveraged loans in the U.S. banking system is “limited” right now, but assessing global exposure is critical to determine if too much potentially destabilizing risk is held in another system, he explained.

Quarles also took questions from the student audience. Regarding the current debate over the breadth of the Fed’s supervisory role, he said that it is important to further clarify the agency’s powers and responsibilities in this regard, and to “develop a very clear view of what we mean by ‘supervision’ and by ‘regulation.’”

He said that the Fed is reviewing its monetary policy framework, as a means of developing better tools to manage potential crises. “These reviews are good for the soul,” he said. “We need to ask, ‘Is it working, and can it be improved?’”

About the Event

Please join Andrew Metrick, Janet L. Yellen Professor of Finance and Management, and Yale Law School alumnus and Federal Reserve Board Vice Chair Randal K. Quarles as they discuss current financial regulation and financial stability issues. There will also be time for audience questions.

Randal K. Quarles serves as the vice chair for supervision at the Federal Reserve Board, overseeing the agency’s regulatory and supervisory agenda. He took office in October 2017 and his term as vice chair ends in October 2021. He is also chair of the Financial Stability Board, which is an international body that monitors and makes recommendations about the global financial system.

This event is open to the Yale community. Registration is required.

The Leaders Forum brings the heads of organizations from across all sectors to Edward P. Evans Hall for discussions about the challenges and opportunities of leadership.

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