Federal Reserve Chair Jerome Powell said U.S. policymakers benefit from participating in
Speaking during a policy forum on Tuesday, Powell spoke about the advantages of engaging with other central banks through organizations such as the
"When there is a situation where there's serious stress, you need to get a global perspective, you need to get perspective around the world, and you need to do that very quickly," Powell said. "The thing that you figure out in those times is that [because of] all the time you spent in Basel, in G7, G20 meetings, you know your colleagues, you know and trust and respect their judgment, and you don't have to go through that that phase of gaining trust in people. You understand each other, you speak the same language."
Powell added that those groups have also been useful policymaking resources during calmer periods. He pointed to the Fed's
"Part of the way that I get to thinking about what the right policy is for the United States is to hear what is going on around the world, what's happening globally and how people think about that," he said. "So it's very, very useful."
Powell's comments came during the Washington Forum on the Canadian Economy, an event hosted by the Woodrow Wilson International Center for Scholars in Washington, D.C. He was joined on stage by his counterpart Tiff Macklem, the top ranking official at the Bank of Canada.
Macklem said collaboration between countries is essential for crafting some policies, such as
"There are some things that we're only going to succeed at if we do them together. The obvious one would be financial supervision and regulation. Our financial systems globally are highly integrated. We were deeply reminded of this in the global financial crisis. What happens in other countries affects all of us. And money flows across borders," he said. "We have to do that together, or it's not going to work."
The comments from the central bank leaders come as the Basel Committee on Banking Supervision faces
Dubbed the Basel III endgame, because it would implement the final components of the most recent set of standards put forth by the international committee, the package has elicited strong pushback from banks and other industry groups. One of the chief criticisms is that the regulations would be overly stringent given the complexity of the U.S. banking sector, raising the question of why American regulators agreed to adopt them in the first place.
"I'm wondering, where did we get this notion that the United States, as the financial superpower of the world, must conform to European standards of banking?" said Rep. Ritchie Torres, D-N.Y. in a House Financial Services Committee
The praise for global collaboration also comes as the International Monetary Fund and the World Bank Group hold the annual spring meeting in Washington, D.C. this week, bringing central bankers and other policymakers from around the world together.
Powell noted that the benefits of international cooperation are not limited to set meetings or conventions.
"I'm constantly talking to other central bankers around the world, also political leaders in our government, and that sort of thing," he said. "It's less about coordination than it is about talking and understanding."
