U.S. policymakers should change their rhetoric from financial stability to "resilience," said Loretta Mester, the president of the Cleveland Fed, on Friday. In a speech at the Boston Fed conference on financial turmoil and monetary policy, Mester said resilience shows the goal of the policy is not to try to thwart all volatility in markets but rather to limit tail risks. Mester said that financial stability policymaking needs to be systematic, less discretionary, and transparent. There needs to be clear goals and a mechanism for holding the institution responsible for promoting those goals. At the same conference,Boston Fed President Eric Rosengren advocated for adding financial stability to the central bank's twin mandates.
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