Richard Fisher

How did they become so big? How did megabanks, superbanks get started? What happened?

Well, of course, you know laws changed, [the] Glass-Steagall [Act] was set aside. Really the genius who figured out the roadmap was Sandy Weill at [Citigroup]. And when he did the Travelers merger, it was opening brand new doors. …

Bankers have always been balance-sheet driven, meaning the security of their balance sheet gave the public the confidence to leave their money there. And they could also use their strong balance sheets to lend and provide the gasoline that fuels capitalism and economic expansion.

That's a different mentality [from] investment banks, which were there to underwrite securities and trade portfolios and take risk. They were income driven. … That's a different culture entirely. …

The injustice is when the taxpayer has to come in and dig them out. And I think that's given rise to both the Occupy [Wall Street] movement and to the End the Fed movement. … There is a sense of injustice here. And I think the best way to put it to rest is to make sure that we have a level playing field, that it's fair, and that we don't have these gargantuan institutions who are dominating the industry.

Our film starts as Bear Stearns is stumbling, and a rumor is going, and the housing bubble has burst, and it's all going to go down in about a week. From Dallas you must have watched some of this happen. What did you think about the idea of pumping that $30 billion into Bear Stearns? …

Well, first of all Tim Geithner then is head of the Federal Reserve Bank in New York, and he was on the front line. The way Ben Bernanke has chaired the Federal Reserve is all of us are consulted in the process. … We had countless video telephone conferences and other conferences, as well as meetings, to go over what was happening.

We did not supervise Bear Stearns. We did not have supervisory power over Lehman Brothers. We did not have supervisory power over AIG. But the role of a central bank in a crisis, in a panic -- and this goes back to the panic of 1825 and basically the handbook that was written by a man named [Walter] Bagehot with the Bank of England -- we, in essence, pulled out that playbook in a modern context, and we opened the floodgates. We were the lender of last resort. That's what a central bank does.

I take no issue with that urgent need for what we called "exigent action." The real thing is to prevent it from ... happening again. And one thing that Dodd-Frank does do is it puts these other kinds of large institutions under a body of supervision. There is an oversight committee. It is now chaired by the secretary of the Treasury. The chairman of the Federal Reserve is involved in all of the other agencies.

But at the time, it was seemingly just an extraordinary failure, or potential failure of the system that could bring the system down. And then there were others that follow, as you know, in consequence.

You felt that way, though? You really felt like when those phone calls and those video conferences were happening, you were at the edge of the abyss?

Well, you could see -- and this is the parlance of our business -- but you could see the credit default swap spreads widening. What that means is that the cost of insurance against risk was becoming more expensive and more expensive, and the market was telling you that something was wrong. And so it's one thing, when you're in a battle, you react tactically.

In terms of developing a strategy, being prepared for this, remember we had gone through almost 25 years of what they call the Great Moderation. Interest rates were low; we had new people coming into the competitive system, new populations like China bringing prices down, and very little volatility in the marketplace, with some exception of 1987, but they didn't last for very long. And I thing people became complacent. And with complacency, people take greater risk.

Again I want to remind you, Bear Stearns was not on our supervisory duty, but we had the job of stepping in to make sure that a panic didn't ensue that would end up compressing the entire global economy and leading to deflation. …

Talk about being on the hot seat.

I do believe the Fed not only did the right thing under the circumstances at the time. I want to remind your viewers, we did something that is very unusual in the government of the United States or any government anywhere in the world. We did what we said we would do, because the system stopped. All forms of payment froze when we got to the depth of the panic. Banks wouldn't lend money to each other.

The first money market mutual fund in the United States quote "broke the buck." Commercial paper, one of the most basic instruments in finance, that market failed. Someone had to step in and remake those markets, and we did it.

That's point number one. We actually did what we said we were going to do. Secondly, they worked. Thirdly, we made money for the United States taxpayer. And this is the most unusual part of all: When we were done, we closed them all down.

I'm very proud to be part of a team that actually did something that's almost never done in government: (a) create something and then close it down, and (b) have it be profitable for the taxpayer. But I certainly don't want to ever be part of any team that ever has to go through this again. … This was incredible decision-making under incredible duress.

But, you know, you could argue almost any single case is exceptional and has to be acted on. It's sort of a perverse Lake Wobegon. All our children are exceptional and everything is exigent and has to be acted on, and it's unusual and unique. And this is one of the traps you fall into when you have these large institutions that you don't really understand, are poorly regulated, which Bear Stearns, and Lehman, and AIG were. …

When you have that kind of concentration where you don't understand really where the risks are -- they're gigantic in size, they have global scope -- that's where you have a huge risk of an error infecting the rest of the system, what they call "contagion" in finance. …

[When Lehman was in trouble, Treasury Secretary Henry Paulson was concerned about moral hazard. What did you think?]

… The issue of moral hazard is an ongoing issue, and you never want to give people an artificial sense of security when they are not deserving of security. …

Is that what we did?

Well, again, you had to act under the circumstances at the time. What my concern is now is making sure that we don't provide this going forward. And you have to differentiate, as I said earlier, between tactics in battle and a broader strategy. And the key is to make sure the strategy long-term is such that we don't put ourselves in a position like this again.

We had gone through 25 years of tranquility, relatively speaking, and people got lazy, people got lax. And I do believe, incidentally, that the supervisory powers, including at the Federal Reserve, you know, sort of were lulled into sleep by the stability that we had enjoyed for so long. Trust me, we are not sleeping but fitfully, presently, and we will be on guard going forward.

At the time, Citibank and Bank of America were considered adequately capitalized under the regulatory standards. Winston Churchill had a great term: "terminological inexactitude." We have to be very, very careful. We've gone through several iterations of what the proper capital standards are. The Fed's working extremely hard at the Board of Governors, presently under the leadership of one of the governors, Daniel Tarullo, to make sure that we are very tough on new capital standards, we put them through stress tests and so on, and making sure that there is no longer the risk of terminological inexactitude. …

The new president comes in. … What was the state of play on inauguration day?

You had a system that was in the midst of crisis. We had an economy that was rapidly submerged in increasing amounts of debt. On top of that, we were in an economic recession. And regardless of whether he's a Democrat or Republican, he stepped right in the middle of it immediately.

And so I think the good thing that the Fed was allowed to do is what the central bank should do at the time. And again, it is a unique body with its capacity to do what it does. It has to be careful. Obviously we've ended up with a much-bloated balance sheet compared to what we had before the crisis.

Just to give you some numbers to put things in perspective: Before the crisis, what we call the "footings" of the central bank, that is the assets balance sheet, was about $800 billion. Now it's close to almost $3 trillion. Well, why is that? It's not because of the special programs we put together the patchwork to solve the insolvency of these various markets. Those worked, as I said before. They've been closed down. They made money for the taxpayer. They restored liquidity in the system.

The question really is what do we do in a postoperative sense? And this is now running into the last year of a first, or ultimate presidential administration for this president. We have kept rates very low. We've re-liquified the system. This is very, very important. We provide the gasoline for the engine of our economy. We have very full gas tanks right now. We have sitting on deposit at the 12 Federal Reserve Banks, where private banks put their excess reserves, almost $1.7 trillion in excess reserves, for which we pay them 25/100ths of 1 percent per annum. No banker wants to just sit with that. They'd like to make more money of it.

Corporate America, separate from that, we estimate has over $2 trillion in excess cash sitting on their balance sheets that they don't need under the current cash flow design and needs and their capital expansion necessities or plans. And then the non-depository financial institutions, the buyer groups and others, have copious amounts of cash.

So we've gone from what happened at the beginning of this presidency, which was no liquidity and a crisis, to now a re-liquified system. … Now we are flush with capital, and we're beginning to see it, but how do you accelerate the economy? How do you incentivize? And so it's a different set of problems now that this president came in with, or the last president had to confront at the end of his term.

There was a lot of talk about nationalizing banks. Citi was the prime candidate, but there was talk about Bank of America as well. First they were going to fire Ken Lewis, and then they were going to nationalize the bank. Would it have helped to fire Ken Lewis? … Would that have had any effect?

I would argue that in a sense, the "too big to fail" institutions were quasi-nationalized; that is, they were saved by either being given leeway to acquire institutions that they otherwise wouldn't have acquired, and also they were subsidized by the government in terms of monies provided to make sure they could have ongoing operations. And so these are bailouts.

Usually in the private sector, you go through Chapter 7 if you're a total disaster, or you go through Chapter 11 if there is hope for the company and it can be reorganized. And the bondholders take it in the neck, but the shareholders get pretty much wiped out. And typically what happens is management gets totally replaced. They messed up, they pay a price, they're let go.

That clearly did not happen in the case of any of the major financial institutions, large or small, that failed in this process.

Why?

Well, because we didn't let the private sector clear the system out of fear that doing so would lead to an implosion of the global economy and deflation. But I think we want to make sure we don't pervert capitalism from the standpoint of letting the market exert its discipline.

We argue at the Dallas Fed, and I argue personally, what makes this country great is what the economist named Joseph Schumpeter called "creative destruction." We are masters of creative destruction in America. If we weren't, we would still be a totally driven agricultural society for example. … That process of creative destruction applies in the rest of the private sector. It should apply in the financial sector, as well. …

What were the stress tests?

I think stress tests are a good idea. What you do in a stress test is you create an alternative scenario of terrible economic outcome, and then you test whether or not you think the bank or the institution can survive that severe, negative scenario. And so these are important things to do from a regulator standpoint.

Now it's also important for these institutions to do it to themselves internally. And I would expect any person that runs a decent business to always be thinking of what they would do under the worst outcome, under a surprise, what economists call an "exogenous shock," something that you didn't see coming. …

The ones that happened in May of '09, was there ever any doubt that all 19 banks were going to pass? …

I can't specifically recall May of '09, but you may realize that we recently did a new series of stress tests, and some made it and some didn't. And so now, of course, we heard some squawking from those that didn't quite make it. But this is part of just making sure that there is capital adequacy and that these institutions can survive an adverse scenario.

I want to come back to the Dallas Fed thesis, which is again, when you have institutions that are "too big to fail," then you have to make sure you are constantly watching them, constantly looking at them, constantly poking at them, making sure that they can survive the worst possible outcome. I think the best outcome is not to have institutions that are "too big to fail," period. …

So how do you do that? … Let's say we pass through the moment where we're really terrified and the crisis is over, and we've saved the banks. Then what should we have done? What could we do? How do we skinny them down?

A very tough question to answer. There are probably several approaches. First, is there is a time to do this? Certainly I would submit, do it at a time … when you're flush with liquidity, which we are now.

And when did we get flush? Have we been flush a year?

We've got them flush for well over a year. And by the way, it's in large part because of the actions we've taken at the Federal Reserve. We bought a significant amount of government treasuries. When we buy a bond, we pay somebody for it. And so we have some $680 billion in mortgage-backed securities, and then we have not quite $2 trillion in U.S. Treasurys, and we've been moving further out the yield curve. As you know, that means we've been buying things at longer maturities.

When we buy things, we pay for them; that just puts money out. When we sell them, we'll take money back in. This is the way to control what's called the "zero bound," when we cut rates to zero. And so through cutting rates to zero, through being active in purchasing securities, and also because people have restructured their balance sheets -- they have been tight with money, they have not been out there employing and expanding but have been saving whatever cash flow they have -- a combination of all of those factors has made for a very liquid system. …

The second thing would be, of course, if we had a more robust economy. And the economy is gaining some steam. As you know, I argue that what's preventing the economy from gaining steam is not only the fact that we have these "too big to fails" that are clogging up the system, but very, very importantly, we have a dysfunctional fiscal policy and a Congress that just can't get their act together. And until they make clear what the tax policy is going to be, what their spending policy is going to be, what kind of regulation is going to affect business, businesses are going to hedge against expansion and wait to see what happens.

But as we go through the process of recovery, I think that's the time to let the marketplace -- there are whole industries that are built, very clever people that are good at taking companies apart, finding value to all of the pieces, building new structures out of that. And frankly, I don't care how large or successful or how rich they become in the process. What I am duty bound as a central bank official to protect is the American taxpayer, and the sanctity of those that deposit money in institutions.

And so if these parts are peeled off -- and again there are whole industries that are devoted to being experts in this, that take away the risk of the taxpayer being put at a point of exposure once again -- I would be happy in the process. And I don't think you have to have government dictates to tell you to do that. The private sector could work this out very, very efficiently.

And so you are really saying that in order to bring them down, the market will take care of it eventually. This is not a role of the government. This is not something that Dodd-Frank or anything else is going to have anything really to do with.

I think Dodd-Frank is going to perhaps assist the process. We'll see. They have to have living wills, for example, basically which is you write out how to dissolve this company without dinging the taxpayer. It probably reads easier than it is to do.

We're going to continue at the Federal Reserve … to insist that they are able to survive stress tests and also meet capital standards which are internationalized. …

One of the things when we go back and we look at the record of what happened that does involve the Fed, is the stuff that Bloomberg reported about. In some cases as much as $1 trillion a day being loaned to the banks, and going back and forth there with all kinds of different facilities that were available. What was that about?

Well, first of all, it's not clear to me. Bloomberg was, that's a misleading report. There was lots of double counting and so on.

The point was that we do run a discount window. That's what central banks do. You lend against collateral. We do it all over the system. I make loans at the Dallas Fed -- I chair my loan committee like many of the bank presidents do -- for as low as $10,000 on an overnight basis.

Now during the crisis, we were making very large loans. And this is a natural operation of any central bank, to make sure that banks can continue to operate as long as they don't become insolvent, in which case, under ordinary circumstances the FDIC steps in and liquidates an institution or arranges for an acquirer. Now with these mega institutions, there was no way that could be done. But we do run a discount window. We're the lender of last resort; we're the bankers' bank. And I don't find that to be unusual, and I don't quite understand --

What the hoo-ha is all about, right?

What the hoo-ha, as you put it, is all about. …

The question is, should we have known? Should Congress, should the American people have known that that was happening in the midst of all of it?

Well, we have increasingly moved down the path of transparency. I think it is very important that we be allowed to do what we do.

For example, if I make a loan in my district in the Dallas Federal Reserve, the 11th Federal Reserve District, to a small agricultural bank that just needs money to tie them over overnight. Nothing is wrong with the bank, but they have a mismatch in their book. If I were to report that publicly, immediately, what kind of stigma might it place on what is otherwise a very sound bank? That's an extreme example.

I think we have to be careful with our transparency now. The laws have required us now to report things with a time lag. You don't want things to be misinterpreted. And we've moved a great deal along the path of transparency. I would argue this: We're going to be 100 years old next year. And only half-jokingly I say that nothing that's 100 years old should ever give a full frontal view to anybody else. It's very important for a central bank to maintain a bit of its mystique.

At the same time, we are a public institution. We work on behalf of the American people. And it's important to us, since we have a faith-based currency -- we're not commodity-based as some people would like; it's not going to happen, by the way, and neither is the Swiss franc, neither is the euro, neither is the yen, neither is the British pound -- to conduct ourselves in a way that engenders public confidence. …

[Isn't there a contradiction] if Citi is in real trouble, and the federal government is pumping lots of money into a bank like Citi or Bank of America and we don't know about it, and Tim Geithner is stepping forward with stress tests and saying everything's good because he's worried about confidence and he's worried about what happens if people get a slightest hint that Citi is collapsing and it needs a trillion dollars a day or whatever?

This is why we should not be put in a position where a few institutions are so dominant that we run that risk in the first place. There's a blessing to having diversification in all portfolio management of whatever kind you can imagine. And concentrated risk will lead you to sometimes make decisions that are counterproductive in the long run.

Now, I am not naming any specific decisions made by a specific official, whether it's Tim or Chairman Bernanke, or anybody else. But this is why we can't allow these institutions to have this kind of stranglehold on our economy. And by the way, it's not just our economy, it's a global economy. We are primus inter pares. We are the leading economy in the world, and as we have seen most recently, our central bank is really the lead central bank for the world at large. We have to make sure that we don't allow this to happen again.

If we don't do something about "too big to fail," what happens?

If we don't do something about "too big to fail," first we lessen the efficiency of our economy. Monetary policy cannot operate with the efficiency with which we would like to operate. We place those that are of lesser size at a competitive disadvantage. We undermine the sense of confidence that people need to have to make capitalism work. And we exacerbate extreme views that are suspicious of whether or not the system is rigged. …

How hard will these banks fight to stay alive? I've heard $100 million was spent lobbying on Dodd-Frank. They're not going to go down easy.

If someone tried to eliminate you or me, we'd fight pretty hard for our own existence. Again, this isn't that we are bad people. It's the process.

And if you're a megabank, and you operate in say 20 states, you have 40 senators, right? Or if you operate in all 50 states, you have 100 senators. That's the way the process works. These people that run for office -- and I've been there, by the way; I went through a midlife crisis and I ran for public office, and so I understand how it works -- you have to raise money to run for public office. And it expands their power by being as large as they are.

Now having said that, during Dodd-Frank something very interesting occurred. Part of the legislation originally was to take away from the Fed … supervisory and examination powers over the community banks. The original proposal under Dodd-Frank was to have us only supervise the very largest banks, those with $50 billion and larger.

The community banks wanted to have the option to be members of the Federal Reserve System and supervised and regulated by us, as well as by the other regulatory agencies, freedom of choice, and they went to work. It was actually a Republican senator from Texas, Sen. Kay Bailey Hutchinson, who became their champion. She got 93 votes in the United States Senate. And Sen. [Chris] Dodd [D-Conn.], who had made the original proposal, only got six. It shows you the power of community bankers.

Community bankers know, because they bank their congressmen and senators, who they're sleeping with, who's got an alcohol problem, who's got a drug problem, who's good, who's bad, etc. And it was very interesting to see these community bankers sort of rise up and insist that they had a right to be supervised by the Fed, or by another agency, but they didn't want that option to be constrained.

And so I wouldn't underestimate the power of independent bankers. But it is true that these very large institutions are spending a great deal of money, as by the way you and I would as human beings, just to preserve our own existence.

I think your opinion is if we had another crisis and a large crisis, we would end up with the government ending up having to bail out the banks again, despite Dodd-Frank. I think it is an important point to understand what your thoughts are.

Well, under Dodd-Frank, the ultimate decision-making authority as to whether or not to close down an institution or not will be the secretary of the Treasury. That's a political appointment. They work for a president. Whether that president is Democrat or Republican, I don't think matters. …

And what's wrong with that?

Well, you tell me. Do you want politicians to have that ultimate decision-making power? Or do you want the marketplace to have that ultimate decision-making power?

What did we have the last go around? Politicians I guess.

We certainly didn't allow the private market to work its way. Again, I want to emphasize that in the heat of a battle, I think we did the right thing. The point is to not let it happen again.

… The thing that I think you guys brought up, which I think is important, is that if another crisis occurs, it means these banks are going to be in trouble all at once. And that they're all internationally based companies.

Sure, yeah, no, it's not just "too big to fail," it's too many to fail. What you end up with is the roots are interconnected. And you also find, and we've seen this through practice, ... if one risk strategy works, let's say the securitization of mortgages, and you find out it's immensely profitable, it didn't take a genius to figure out that your competitor is going to do the same thing to become immensely profitable.

And so again, with all due respect to Congressman [Barney] Frank [D-Mass.], who is a very able, smart fellow. He has written or has overseen the writing of 2000 pages of legislation, with 541 sections or whatever it is, it kind of reminds me of the French Prime Minister [Georges] Clemenceau's comment after Woodrow Wilson's Fourteen Points. Clemenceau said, "God did it in 10."

And so we've made this thing immensely complex. Sometime simplicity is the greatest virtue, and I think the simplest thing to do here is to just to make sure that we don't have institutions that are "too big to fail." I'm not alone on this front. Paul Volcker will argue the same thing. The head of the Bank of England, Mervyn King, would argue the same thing. ...

Were there opportunities that we missed to accomplish this, especially when the banks were on the ropes, basically, because they were on the taxpayer dollar?

Well, it's easy to be armchair quarterbacks after the fact. But when you are in the midst of battle, when you're in the midst of a crisis, I think it's very hard to structure an entire system. Instead, you are putting out the fires.

But what we now have to do is rebuild the ecosystem of banking and make sure that we do have the firebreaks along the way. And rather than just fight those fires one after another as they come up, make sure they won't spread and burn down the entire economy.

But when you look back, the value of history, too, is to look back and say there were these moments.

I think the moment is now, because we are, as I said earlier, the system is liquid. Before, liquidity had disappeared. That's not the time to act. Secondly, the economy is strengthening. So we may not be quite strong enough. We argue at the Dallas Fed that one of the reasons we are not strong enough is because we're sort of being held to the sludge that's around the pistons that is the "too big to fail" institutions. But I'd rather do it now under conditions where liquidity is abundant. And I think now is the time to act. …

We've talked to executives from some of these banks, from Wells Fargo and some of these other "too big to fail" institutions. They say they were never really in trouble during the crisis, that they could have survived without government help. … Were they actually in trouble during the crisis? Were the largest five institutions, would they have survived without help from the government?

Well, the question is about would the five or more have survived without help from the government. There were different degrees of health, and I'll let them speak for themselves. I hear them saying that some felt compelled by virtue of the pressure put on them by the secretary of the Treasury, and by the New York Fed to participate. And the reason for that was to eliminate the stigma that might be associated. And indeed, some of these banks are better operated, have less risk than others. But in the end, they all decided to participate, that's a fact. …

When you heard [Lehman Brothers] going down Sunday night, did you figure big trouble in the future, in the immediate future?

I knew about it before that Sunday night.

And you knew how bad it was going to be?

I can't say again, as a member of a body of 18 people that I personally knew how bad it would be, but I did know, because you could see it in the numbers, and also you could hear it in our discussions. And we talked about these things, that there were others who were significantly exposed. And if you had been watching the marketplace, you could see the spreads and the cost of insuring against failure for these various institutions. And so Lehman wasn't alone. The complexity of Lehman was only found out after you pulled back all of those layers.

I do want to give the New York Fed enormous credit. In a very short period of just several days of peeling back all of the layers of that onion, the SEC [Securities and Exchange Commission] should have, because they were the supervisor, have understood all of the underlying risk. But the New York Fed staff, assisted by others from around the system, did an incredible job of actually wrapping their arms around the risk of what was actually Lehman Brothers.

So why'd we let it go? How did it go?

Well, that's something for the history books to document, but it is what happened.

In 2008, when you're talking to Tim Geithner at the Federal Reserve, what is motivating him? What's motivating the way he's looking at the crisis and the decisions that he's making?

First, we meet as a group. And we obviously would have sidebar conversations. I've known Tim a long time. …

In my bilateral conversations with Tim, but most importantly in our group conversations, he's trying to figure out the best way to keep a system stable. And I've probably known Tim Geithner longer, because we served in the Clinton administration, than most of my other colleagues. And so if you're asking did I doubt his sincerity or his integrity, I did not.

In fact, when he came under enormous public criticism, I sent him a little e-mail that said, "Illegitimi non carborundum," which is an old Harvard saying of "Don't let the bastards get you down." Interestingly, he said his grandfather had had that in tile I think in his kitchen. And so that sort of reinforced he was doing the best job he possibly could. He was on the front line of action at the New York Fed.

The question is what motivated Tim Geithner. That was the question you asked. And I would say trying to do the best he possibly could to contain what was a massive conflagration that just broke out. Yes, we should have been more aware of the risk that was in the system, but the other supervisors should have been as well. And Tim's job at the time was to try to stem the damage that could be done here. And I think what motivated Tim, I know what motivated Tim, was to do what's in the best interest of the American people. …

Did you know that Ben and Hank were going over to [Rep. Nancy] Pelosi's [D-Calif.] office and have that meeting where they said, "We need $700 billion as fast as you guys can give it"? I've talked to many people who were in that room and they say talk about scared to death when he said there won't be an economy on Monday if we don't act.

Ben Bernanke is an unusual individual. I've gotten to know him very well. There's not a bone of pretension in that man's body. What you see is what you get. He's totally fair. He has no desire to be viewed as a big deal or to go on to do something else. He'll go back to academia or write a book or whatever. If you look at the way he and his wife, Anna, live it's the most humble lifestyle. She rides the subway. There's no pretense to these people.

And I think you see, whether you agree with him or not -- and sometimes he and I disagree on policy and I'm rather outspoken about it, and by the way he's extremely tolerant of my being outspoken -- I don't think you could ever doubt his sincerity, I never do, and also his humility.

It's very important for central bankers to be humble. It's especially important for economists to be humble. In fact, it's extremely rare for economists to be humble. And he has that rare combination of enormous economic history and understanding, mathematical brilliance, but he knows the limits of mathematics, and humility. That's what makes Ben Bernanke extraordinary. …

We talked to a guy, who basically said the crisis has never stopped. It's been ongoing through '08 on up to now. As long as the "too big to fail" banks are out there, as long as things are the way they are, it's not over. We see it in the rumblings in the world right now. Agree?

We're in a postoperative phase here. The patient is able to get off the table, meaning the economy. We still have the patient on medication, that is, accommodative monetary policy. You talked about stress tests earlier. We're testing the patients to make sure that this patient can get up and walk, and later on run and move forward.

But there are still wires attached to the body, and medication is still being applied in terms of monetary accommodation, easy money at very low rates. At the right time, we will have to withdraw that. We're not there yet. …

We're much, much, closer, and so I think we're not out of the crisis from the standpoint of the totality of it, but it's most extreme and intense phase, we have managed to pass through. And now we just have to make sure that we don't get ourselves in that position again. First, that the patient's recovered and secondly, that we don't put the American economy at risk like it was put before, for whatever reasons it got there. …