‘Sig­nif­i­cant Un­cer­tainty’ about Fis­cal Pol­icy: Fis­cher

The Economic Times - - The Infosys Saga -

Wash­ing­ton: US Fed­eral Re­serve vice chair Stan­ley Fis­cher said there was sig­nif­i­cant un­cer­tainty about US fis­cal pol­icy un­der the Trump ad­min­is­tra­tion, but the Fed would be strict in meet­ing tar­gets of cre­at­ing full em­ploy­ment and getting in­fla­tion to 2%. Speak­ing at the War­wick Eco­nomics Sum­mit on Satur­day, Fis­cher also said he thought Dodd-Frank fi­nan­cial reg­u­la­tion would not be re­pealed as a whole, and he hoped cap­i­tal re­quire­ments for banks would not be sig­nif­i­cantly re­duced.

“There is quite sig­nif­i­cant un­cer­tainty about what’s ac­tu­ally go­ing to hap­pen, I don’t think any­one quite knows. It’s a process which in­volves both the ad­min­is­tra­tion and the Congress in de­cid­ing fis­cal pol­icy,” Fis­cher said, in re­sponse to a ques­tion.

“At the mo­ment we’re go­ing strictly ac­cord­ing to what we see as our re­spon­si­bil­ity­ac­cord­ing­tothelaw,whichis­main­tain- ing full em­ploy­ment and getting in­fla­tion to 2%.” He also said he thought Dod­dFrank bank­ing reg­u­la­tion leg­is­la­tion would not be re­pealed, though there may be some ad­just­ments.

“I don’t think Dodd-Frank as a whole is go­ing to be re­pealed, but there may be some ad­just­ments to it,” he said. “Sig­nif­i­cantly re­duc­ing cap­i­tal re­quire­ments would re­duce the safety of the sys­tem. I cer­tainly hope it’s not go­ing to hap­pen.”

Fis­cher also men­tioned ad­just­ments to Dodd-Frank could in­clude be­ing less de­mand­ing of com­mu­nity banks.

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