The Fed: Fed’s Rosengren calls for more tools to lessen severity of next economic downturn

Boston Fed President Eric Rosengren

Economic policy makers on state and federal level should begin now to take actions to limit the severity of the next downturn, including by boosting the capital banks have, Boston Fed President Eric Rosengren said on Wednesday.

The costs of high unemployment from the next recession “will be disproportionately borne by those who can least afford them, and a variety of actions could be taken by policy makers to make periods of high unemployment less likely,” Rosengren said, in a speech to the Peterson Institute for International Economics.

One step that the Fed could take would be to ask the nation’s largest banks to boost their capital levels now through use of a countercyclical capital buffer, he said.

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