Speech: FDIC Chairman Martin J. Gruenberg at the Brookings Institution: Three Financial Crises and Lessons for the Future
SPEECH | JANUARY 15, 2025
Speech: FDIC Chairman Martin
J. Gruenberg at the Brookings Institution: Three Financial Crises and
Lessons for the Future
I would like to thank the Brookings
Institution, and my friend Aaron Klein, for giving me the opportunity
to speak to you today.
For better or worse, over the course of
my career, I have had the opportunity to participate in the response
to three financial crises – the thrift and banking crisis of the 1980s
and early 1990s as a member of the staff of the Senate Banking
Committee, the Global Financial Crisis of 2008 as Vice Chairman of the
FDIC, and the three large regional bank failures in the spring of 2023
as FDIC Chairman.
As I look back on those experiences, I am
struck by the commonality of the causes of those crises –interest rate
and liquidity risk, concentrations of assets and deposits, leverage,
rapid growth, inadequate capital, new activities and products whose
risks were poorly understood, interconnection with non-bank financial
companies, poor bank management, and failures of supervision and
regulation to identify and address those risks, and in some cases
exacerbating them.
As I leave the FDIC, I thought there might
be value in sharing some of the lessons of that experience as we head
into a period of uncertainty about the future path of financial
regulation in the United States and globally. In particular, I offer
the observation that while innovation can greatly enhance the
operation of the financial system, experience suggests it be tempered
by careful and prudent management and appropriate regulation and
supervision.
Read Chairman Gruenberg's Full Speech
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