Targeted Regulation Needed If Biden Lets Economy Run Hot: Kathryn Judge

The video discusses financial stability priorities under the new administration, focusing on potential threats from the non-bank financial sector. It highlights the importance of regulation in maintaining economic growth and stability, addressing shadow banking, and ensuring bank capitalization. The role of retail investors and oversight bodies like the FSOC is also examined.

What is the top priority for the Treasury under the new administration?

• Identifying and addressing potential threats to stability

• Reducing taxes

• Increasing government spending

• Promoting international trade

What is a key lesson from the 2008 financial crisis regarding shadow banking?

• It poses no risk to banks

• It is well-regulated and understood

• Risks can spill over into banks from the non-bank sector

• It is unrelated to financial stability

What is a potential effect of deregulation in the short run?

• Decreased credit creation

• Reduced economic growth

• Increased economic stability

• Boosting credit creation

What is a concern for open-ended mutual funds?

• They are too liquid

• They are not regulated

• They can cause runs if bonds are not liquid

• They have no impact on stability

What is the relationship between running a hot economy and financial stability?

• They are unrelated

• A hot economy always leads to instability

• Stability must be ensured to allow a hot economy

• A hot economy guarantees stability

What role does the Financial Stability Oversight Council play?

• Coordinating among financial regulators

• Managing government debt

• Making financial rules

• Setting interest rates

What is a priority for maintaining a well-capitalized banking sector?

• Reducing capital requirements

• Increasing shareholder payouts

• Building up capital in good times

• Eliminating all regulations