Jeffery Lacker, the president of the Federal Reserve Bank of Richmond, raised the possibility that financial system fragility is induced by "poor policy", rather than being inherent to financial markets, in a speech in Arizona on Friday.

Economic models based on financial frictions were used to justify many of the Fed's interventions during the financial crisis, Lacker said, adding that such models are necessarily abstract and stylised, and their applicability to the actual situation at hand