One aspect of grit that I think is particularly important is the willingness to take a stand when circumstances demand it. Such circumstances may not be all that frequent, but in every life, there will be crucial moments when having the courage to stand up for what you believe will be immensely important.

My predecessor at the Fed, Chairman Ben Bernanke, demonstrated such courage, especially in his response to the threat of the financial crisis. To stabilize the financial system and restore economic growth, he took courageous actions that were unprecedented in ambition and scope. He faced relentless criticism, personal threats, and the certainty that history would judge him harshly if he was wrong. But he stood up for what he believed was right and necessary. Ben Bernanke's intelligence and knowledge served him well as Chairman. But his grit and willingness to take a stand were just as important.

In response to a question about what he expects his legacy to be perceived to be:

Well, of course, that’s going to be for others to determine. I guess what I would hope to be able to say is several things. First, I came into the Federal Reserve as a governor now some 11 years ago; quite a long time — with a lot of interest in communication and transparency. And I think, you know, in the last 11 years or eight years, however you want to count, the Federal Reserve has made some significant strides in that area, including, for example, as I mentioned in the press conference, the stating of a numerical objective for medium-term inflation and other communications innovations as well.

So I think that’s something that I think is quite — has changed over the last decade. For better or worse, of course, I was at the Fed during the crisis and the aftermath. We have — you know, the future, again, will judge the response to that. But what is certainly true is that the Federal Reserve, as an institution, has changed very sharply in terms of its structure and the resources being devoted to financial stability questions.

And I would say that this relates both to the actions we took at the height of the crisis, which I viewed as bringing Bagehot’s wisdom, the lender-of-last-resort wisdom, back into the modern context, but also the work we’re doing now to try to reduce the risk that another financial crisis will hit someday. That includes our monitoring, our oversight of systemically important firms, our stress tests, which I think is an important development in financial regulation, and more generally our macroprudential approach to financial stability, which, again, means that we look not only at individual firms, as important as that is, but we also try to identify risks and vulnerabilities to the financial system more broadly.

In monetary policy, you know, we’ve confronted the zero lower bound. Again, people have to judge whether we confronted it successfully, but we’ve used new policies to do that. And I think we have in fact changed, to some extent, our approach to one that is more tied to the forecast and tries to lay out in more detail how monetary policy will react over time to changing economic conditions. So there are some changes in monetary policy.

But finally, I think the Federal Reserve is a remarkable institution. It has a superb staff, a great deal of expertise. And I hope that during the time that I’ve been there that we have succeeded in preserving those strengths and adding to those strengths, increasing the amount of expertise we have in critical areas like some of the financial stability areas, increasing interdisciplinary cooperation and work and just making the institution stronger as an institution going forward, because I think one of the lessons — I mean, we had a very fascinating day today talking about a hundred years of the Federal Reserve.

It’s a central institution in the United States. It has a very, very important role in the economy and in the lives of ordinary Americans. And it’s critical that it be a strong, well-managed, well- staffed institution. And these internal management issues, which are pretty invisible I think to outsiders, are very important because they’re the factors that determine how strong an institution this will be over the next hundred years.