Board of Governors of the Federal Reserve System

Good afternoon. I'd like to welcome our guests to the Federal Reserve.

This meeting marks an important moment, because today we are putting into place one of the last critical safeguards that make up the core of our post-financial crisis reform efforts.

These reforms have been guided by common sense principles: bank shareholders and debt investors place their own money at risk so depositors and taxpayers are well protected, and the biggest banks must bear the costs that come with their size. Specifically, these banks must bear the costs their failure would impose on the financial system and the economy.

The final rule we are about to consider advances both principles, because it requires systemically important domestic bank holding companies and the U.S. operations of systemically important foreign banks to issue a minimum amount of long-term debt that could be converted into equity to recapitalize a failed institution. Simply put, this requirement means taxpayers will be better protected because the largest banks will be required to pre-fund the costs of their own failure.

We can already see how post-crisis reforms have led to many changes. U.S. banks are far stronger than they were a decade ago, with more capital and more stable funding. Our banking supervision is strong. And our economy has benefited: growth in bank lending is now back to pre-crisis, pre-bubble levels.

Today's rule and the many other reforms we have put in place help keep our financial system strong and stable--not for its own sake--but for the sake of the workers, families and businesses who determine the long-run success of our economy.

I will now turn to Governor Tarullo, who will provide more background on how today's final rule will achieve these key aims.