Fed Can and Should Take More Risk Than It Did During '08 Crisis, Tarullo Says

The transcript discusses the Federal Reserve's role in taking on more risk during a crisis, comparing it to the great financial crisis where no Fed facility needed Treasury funds. It highlights the need for the Fed to be prepared for potential losses, especially with facilities like the Main Street facility, which are backed by the Treasury. The Fed should be ready to set up non-profitable facilities as long as they are supported by Treasury equity.

In what way does the teacher believe the Fed should prepare for non-profitable facilities?

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What reassurance does the teacher mention regarding the equity put in by the Treasury?

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