mis-management speaks

Charles Evans, president of the Chicago Fed:

“It is important to improve resolution procedures for financial institutions in the event of insolvency.

This includes requiring firms to formulate contingency plans that would be used in the event of their failure. Doing so should reduce the chances that the collapse of a particular institution will threaten the broader financial system …

“At the same time, maintaining financial stability is also likely to involve more-proactive, state-contingent measures, that is, policies that vary with economic conditions.

“For example, when faced by several indications that asset markets may be exuberant, we might consider increasing capital requirements.”

Wall Street Journal