INSUBCONTINENT EXCLUSIVE:
By Craig Torres and Christopher CondonFormer Treasury Secretary Lawrence Summers called the results of the most recent Federal Reserve
comments after a presentation at the Federal Reserve Bank of Boston on the persistence of low interest rates in global economies, a
phenomenon which he explained as excess savings pursuing a shortage of investments
That trend has been partially mitigated by fiscal programs, he said, such as Social Security and Medicare in the United States , which
nine-year-old United States expansion where the policy rate is only 1.75 percent to 2 percent currently, can produce asset bubbles.
Crisis
ResponseFollowing the 2008-09 financial crisis, Congress and regulators instituted a number of reforms to strengthen the financial system
One is the stress test where the capital of the largest, systemically important banks is tested against severely adverse economic scenarios
release.
The Fed asserted that if every bank continued to pay out capital in the form of dividends and share buybacks despite the severe
Cleveland Fed President Loretta Mester, Boston Fed President Eric Rosengren, Kansas City Fed President Esther George and Fed Governor Lael
Brainard to use the current period of strong growth and rising asset prices to ask banks to build up capital beyond the stress test
practices.
Federal Reserve spokesman Eric Kollig declined to comment.
