randy quarles spoke in washington on friday.sees possibles changes whending not announcing they failed to be allowed to increase their dividends or do share buybacks. make them more transparent. things like that. he does not see any need for new countercyclical stress capital buffers. a new rule to cover that. here is what he said on friday. areinancial stability risks moderate currently and therefore in our -- and therefore are in a methodical framework. again, randy quarles is in favor, as expected, he has been seen as someone who thinks the rules are too tough. but maybe eases some rules. meanwhile, an announcement from the fed that the end of this month we will be getting a new report on financial stability, that they will be issuing every fall and spring. is putting ae fed big spotlight on this. 10 years since the last crisis. no surprise that a lot of central banks are focused on financial stability and the risk that might have been created by keeping policies lose for so long. numberit is probably three on the list of ind

what do you want to hear from randy quarles?t thing i hope i hear is this is not the end game. i view with the fed has done with their closer rules to be progress, but progress is not to be infused with success. number one, i'm very happy the senate and house got together to pass the economic growth regulatory relief act. otherwise we would not be here in the first place. it allows our community banks to escape the worst of dodd-frank. i know vice-chairman corals has set up a goal of transparency, efficiency, supposedly. i think he has made some progress but we are not there with success. the volcker rule is still very convoluted. we have historic levels of volatility and liquidity that should we us ill, have times of market stress. unfortunately, i think the fed could have done a whole lot more with their other prudential regulators in trying to simplify the volcker rule. that is number one. number two, i still don't understand why we have a qualitative aspect and not just a quantitative aspect to scar, a thatthe stress tests l

wasolleague, randy quarles, just named as the head to the financial stability board. that is great. it shows the united states is still committed and engaged strongly. they are essential. we cannot look at domestic regulation anymore. we have to have level playing field. 's have to trust each other regulatory and supervisory schemes. that is something we are strongly committed to. question, icond want to come back to the issue of instability. do you think that when the next downturn comes, it will be caused by the effects of instability in the financial sector, particularly a downturn in equity prices as long-term interest rates rise substantially from where they are today? marty.k you, i do not see vulnerabilities as today inoverall financial markets or the system. in terms of -- business cycles do not last forever, unless you are australia, where they are in year 27 of their expansion. which sounds like forever. i don't know. i don't know what it will be. often there is exhaustion is events that no one sees coming. when i was in government before the iraq war happened, that was a

will, the midsize and small lenders, they're the ones that are finding the impact of changes that randy quarlesding at the fed. among the big banks, they're seeing lessch it the dodd-frank rule is still there. there has been dialback of the vogel rule those aspects. but for the banks, not that much has changed. it may change. and that's something to look forward to because if you're in administration, how many dowels do you have? fiscal policy is off the table you probably can't do another tax bill but you can push on deregulation some more, you can push on trade some more. >> how much does the china issue get even raised in a situation like this today? >> probably very little. other than in the sense of what's the impact of china, the forecast on the global economy, what's the impact of that in the u.s. forecast. so, in that sense, yes, very much so. i think, you know, in terms of how much will trade, the trade tensions impact the forecast, that probably gets fed in somehow. but that's -- >> the conversation, the whole tariff, the trade war with china impacts china itself which then impacts th

situated to share the latest development developments, federal reserve vice chairman for supervision randy quarles. before joining brookings i, too, was at the federal reserve providing analysis to policy makers on the u.s. economy and labor markets in particular. so i recognize the critical a stable financial system is to our economy and to all who participate in it. in that role i had the pleasure of interacting with vice chairman quarles on a few occasions, and i'm grateful that he was able to stop by this morning and share his valuable perspective he was confirmed as vice chairman for supervision a little more than a year ago, and just six months later congress passed new legislation to adjust several aspects of the post financial crisis, financial regulatory framework created by dodd-frank. vice chairman quarles continues to play a vital role in the implementation of those regulatory changes, which is one of the many reasons i look forward to his remarks today. vice chairman quarles brings to the federal reserve board decades of experience as a banking lawyer in both the public and private se

committee for fsb leadership, and was pleased to at yesterdays announcement of fed vice chairman randy quarles as the fsb next chairman, the first american to serve in that role. we continue our work. the implementation of firrma, the energy initiatives and chimes unfair trade practices and lack of reciprocity in market access. we maintain active economic dialogues with other countries to assess systemic vulnerabilities and to support democratic principles and institutions. in latin america notably in the western hemisphere with emphasized the risk and challenges posed by tyranny, name of venezuela, cuba and nicaragua. as brexit approaches, treasury is analyzing risk to the international financial system. we are working toward improved trade arrangements with the eu. the administration has notified congress on october 16 of its intent to start trade negotiations with the uk once it leaves the eu. we continue to work to streamline the g20. i'm going to stop at this point and leave discussion of these to my state department colleague secretary de marcellus. thank you. >> will secretary de marcel

i would point out my colleague and vice-chair, randy quarles, was just named the head of the financial stability board, which is probably the senior post this area in the world. that is great and i think it shows the united states is still committed and engaged strongly in these forums. they are essential. we can't just look at domestic regulation anymore. we have to have a level playing field. we have to be able to trust each other's, different countries regulatory and supervisory schemes. so that is, i think something we're still strongly committed to. >> for my second question, i want to come back to the issue of instability. do you think when the next downturn comes, it will be caused by effects of instability in the financial sector, particularly a downturn in equity prices as long-term interest rates rise substantially from where they are today? >> so, as i, thank you, marty. as i mentioned, i don't see vulnerabilities as elevated overall. ga in the financial market, in terms of the financial system. business cycles don't last forever, unless you're australia where they're in yea

i got to ask him about that directly and i know randy quarles is open to that. >> thank you mohamed hadfor you. we are getting a lot of questions for mohamed from our viewers. mohamed el-erian is our guest host today i want to start with a different one than i told you in the control room matthew bri will asks can he comment on the stock prices and move higher together they always seem to be in odds in one way or another. >> look at europe. the differential between the 10-year here and the 10-year in germany is now 270 basis points. if pt you want to have a long view on rates, you're taking a long view on europe. >> that will be what holds us? >> correct and that's really important. you're not taking a view about the correlation with u.s. stocks, et cetera. you're taking view with the ecb. and it's a surprising thing to me that that differential has remained so high given that the ecb has signalled it is exiting. >> yesterday they said it again. >> yeah. it's going to be interesting to see how that evolves >> that plays into what we're also hearing from ryan howe. he writes in, even if