Former officials say Fed should impose tighter regime

Donald Kohn

The Federal Reserve’s regulatory response to Covid-19 is posing unnecessary risks to the financial system and US economy, according to two former senior Fed officials.

The Fed should stop banks issuing dividends, argued former vice-chair Donald Kohn and former board of governors member Jeremy Stein, during a discussion hosted by the Brookings Institute, a US think-tank. It had to prepare the system for an increase in loan losses over the coming quarters, they both said.

“Now is the time to

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