How Quarles Could Influence Fed Policy

The video discusses the roles of Janet Yellen and Quarles in monetary policy and banking regulation. It highlights the balance between rules and discretion in monetary policy, emphasizing the need for expertise and judgment. The video also covers the challenges of stress tests in banking regulation, noting the potential for standardization under Quarles.

What is Janet Yellen's stance on the use of rules in monetary policy?

• She opposes any form of standard practices.

• She believes in complete discretion.

• She prefers predictability but values flexibility.

• She fully supports strict rules.

Why is expertise crucial in monetary policy decision-making?

• Because it involves simple decisions.

• Because it requires understanding complex market dynamics.

• Because it is based on fixed rules.

• Because it is a new field with little research.

What role does the vice chair play in banking regulation?

• Regulating foreign exchange rates.

• Managing the national budget.

• Overseeing stress tests for banks.

• Setting interest rates.

What is one reason banks dislike the stress tests?

• They are too predictable.

• They are not conducted annually.

• They are too lenient.

• They are too strict and unpredictable.

What change is expected with Quarles replacing Tarullo?

• More arbitrary stress tests.

• Increased unpredictability in regulations.

• Standardized and predictable stress tests.

• Elimination of stress tests.