- Kevin Warsh, former Federal Reserve governor, warns that the financial system remains vulnerable to the same risks that triggered the 2008 crisis.
- Warsh stresses the importance of taking risk seriously, citing lingering trauma from the crisis as a guide for current policy.
- His comments come amid growing debate over regulatory looseness and the potential for systemic shocks.
Kevin Warsh, a former Federal Reserve governor who served during the 2008 financial crisis, said the experience left him with lasting scars that shape his views on risk management. Speaking at a conference in New York on Tuesday, Warsh warned that policymakers and investors must remain vigilant against the buildup of leverage and opaque financial products.
“We still have scars from 2008, and that’s a good thing,” Warsh said. “It means we take risk seriously.” He argued that the post-crisis regulatory framework, while necessary, may have created complacency, and that new risks—such as those in private credit or digital assets—deserve closer scrutiny.
Warsh’s remarks come as the Federal Reserve and other regulators debate whether to tighten rules on non-bank lenders. “Without a deal to address these vulnerabilities, we could be forced into a crisis response that’s far more painful,” he added.
Efforts to reform financial oversight have hit a snag in Congress, with lawmakers divided over the scope of new rules. Warsh, who is also a candidate for Treasury secretary in a potential second Trump administration, declined to comment on his political ambitions.
Correction: An earlier version of this article misstated the location of the conference. It took place in New York, not Chicago.