John C. Williams

Systemic Risk: Inevitable or Preventable?

Scarlet Fu, Dimitri Demekas, Fiona Frick, Michael Piwowar, Paul Sheard, John C. Williams

Leading regulators and analysts including John Williams of the Federal Reserve and Michael Puar of the SEC convened to define systemic risk as threats stemming from liquidity evaporation and deep interconnections between financial sectors. The panel identified diverse primary hazards ranging from China's credit boom and European negative-yielding bonds to U.S. fiscal policies and the opaque risks within illiquid ETF markets. While participants agreed that Dodd-Frank reforms have successfully made major banks more resilient, they emphasized that future stability requires enhanced global regulatory coordination, better fiscal-monetary alignment, and a focus on building system-wide resilience against unpredictable shocks.