Differentiating Recent Failures from the 2008 Crisis
Shambaugh explained that the recent bank failures and developments are distinct from the 2008 global financial crisis, primarily focused on credit risk. Regulators are working diligently to bolster confidence in domestic and international liquidity.
Improved Financial System Since Previous Crisis
While speaking at the Brookings Institution think tank, Shambaugh noted that the overall financial system is now better regulated, capitalized, and more liquid than the 2008 crisis. This is ahead of this week's International Monetary Fund and World Bank meetings.
U.S. Collaboration with Other Countries for Growth
Shambaugh mentioned that U.S. officials plan to collaborate closely with other nations to communicate their policies, potential spillovers, and impacts on emerging markets and low-income countries. Despite these concerns, the baseline forecast still anticipates continued growth in the global economy.
Strengthening Financial Resilience with International Partners
The Undersecretary stated that efforts would persist in working with international partners to boost financial resilience. He acknowledged that recent events serve as a reminder to address unfinished regulatory tasks and "repair and fix any cracks in the regulatory perimeter."