How has the work of the New York Fed been impacted by the financial crisis?
The crisis has required the Fed to make a huge investment in providing liquidity to the banking system through its own resources and in helping to administer and partially fund federal programs that were put in place to save the banking system. The staff has been increased, responsibilities have grown, and the Fed is working intensively with the U.S. Department of Treasury on a wide range of programs and issues that are critical to the future of the economy. Going forward, the Fed will likely help design and run a system for managing risks in order to prevent another crisis in the banking system, both nationally and globally. While analysts predict that the national economy will begin improving in 2010, you’ve said it will take several years longer for New York to see much improvement. Why? Financial services represents a third of New York’s economy and at least 20 percent of our tax base. This industry is the linchpin in sustaining New York’s role as a global center of economic power.
