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Balance Quote by Jerome Powell

“Legislative reforms in the 1990s and the public/private structure led managements to expand the GSEs' balance sheets to enormous size, underpinned by wafer-thin slivers of capital, driving high shareholder returns and very high compensation for management.” quote by Jerome Powell
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“Legislative reforms in the 1990s and the public/private structure led managements to expand the GSEs' balance sheets to enormous size, underpinned by wafer-thin slivers of capital, driving high shareholder returns and very high compensation for management.”

Jerome Powell

About This Quote

Source Speech: Economic policy address, 1999

Deregulation and thin capital buffers allowed financial institutions to expand risk, leading to high profits and executive pay.

In simple terms: Weak oversight let banks grow dangerously.

Key Takeaway

Strengthen capital requirements and oversight.

Themes

financial regulation risk management corporate governance

Mood

cautious analytical

Type

economic policy

When to use this quote

  • banking sector
  • policy reform
  • executive compensation

Key Concepts

leverage moral hazard shareholder incentives

Questions to Reflect On

  • How to balance risk control with market dynamism?
  • What safeguards prevent future excesses?
A Different Perspective

Over‑regulation can stifle innovation and credit availability.

2.5 out of 5 (6 ratings)

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