Press Releases

cover of 2013 Annual Report

May 21, 2014

Richmond Fed's Annual Report Asks, "Should the Fed Have a Financial Stability Mandate?"

Richmond, Va.

The Federal Reserve Bank of Richmond today released its 2013 Annual Report, which features the essay, "Should the Fed Have a Financial Stability Mandate? Lessons from the Fed's first 100 Years."

In the essay, Richmond Fed President Jeffrey Lacker and Research Publications Content Manager Renee Haltom explore the Fed’s role in financial stability. Following the global financial crisis of 2007-08, the Fed has been given enhanced regulatory responsibilities to prevent future crises. However, most of the Fed’s actions in pursuit of financial stability have historically come through emergency lending once crises are underway. The authors conclude that arguments in favor of emergency lending are based on erroneous readings of history. Instead, emergency lending may undermine financial stability as well as the Fed’s core mission of providing monetary stability.

Sections of the essay are:

  • What problem were the Fed's founders trying to solve?
  • Was the Fed created for financial stability?
  • What about Bagehot and the central bank as "the lender of last resort?"
  • Would failure to lend have caused another Great Depression?
  • Why is too much lending risky?
  • Is emergency lending necessary?
  • Is there a better path to financial stability?

An accompanying video is available on the Bank's website.




In addition to the essay and the Bank's financial statements, the Annual Report includes a summary of the region's economic performance in 2013 and an overview of the Bank's workforce development efforts.

The Annual Report is available on the Bank's website.

The Richmond Fed serves the Fifth Federal Reserve District, which includes the District of Columbia, Maryland, North Carolina, South Carolina, Virginia and most of West Virginia. As part of the nation's central bank, we're one of 12 regional Reserve Banks that work together with the Federal Reserve's Board of Governors to strengthen the economy and our communities. We manage the nation's money supply to keep inflation low and help the economy grow. We also supervise and regulate financial institutions to help safeguard our nation's financial system and protect the integrity and efficiency of our payments system.


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