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and the federal reserves commitment to price stability means that we will be achieving this in an environment of low and stable inflation,4
i believe that your efforts and this constitutional review are very important because they will lead to more effective oversight and expert advisory arrangements that will help ensure that highquality international standards will be developed based on sound principles and appropriate due process and in a manner consistent with the public interest,3
shortterm capital flowed from canada to the united states in increasing amounts between 1965 and 1968 this was partly due to policies aimed at fulfilling the requirements of the canadianus reserve agreement of 1963 following the modification of that agreement in december 1968 the canadian outflow was reduced sharply in 1969 and 1970 canadas overall payments balancel with the united states improved greatly in the last half of the 1960s rising from a deficit of 15 billion in 1965 to a surplus of 626 million in 1970 this was accomplished in a consistent pattern of yearbyyear improvements,3
given the explosive growth in telephone traffic in recent years half our population would now be telephone operators,0
that doesnt mean that the feds paperbased businesses will be disappearing any time soon,4
5 jerry l jordan a market approach to banking regulation address delivered to the cato institute eleventh annual monetary conference march 18 1993 reprinted in the cato journal volume 13 number 3 winter 1994 pp,2
the magnitude of the devastation called for a significant response from the federal government and the congress and the president acted quickly to provide emergency spending and tax breaks to aid the areas affected by the hurricanes,3
many innovations come in the form of how we do things rather than simply what we use to do them,0
some of the most innovative have come out of community colleges,0
these limitations arise because of the inherent fallibility of the tools in a world of regulatory arbitrage because the scope of our regulatory authority does not extend equally to all parts of the financial system and because risktaking naturally tends to be structured in a nontransparent way that can make it hard to recognize,2
however because specific or new types of market failures might be driving a particular asset price bubble some future bubbles will almost certainly create unanticipated difficulties and as a result adjustments to our policy stance to limit the market failure contributing to a bubble could be very beneficial if identified and implemented at the appropriate time,2
central bank independence correlates well with low and stable inflation which correlates with sustainable economic growth that maximizes employment,0
indeed many of the structures seemed to be created to satisfy investors strong demand for securities that carried investmentgrade ratings but that might provide slightly higher yields than other investmentgrade securities such as corporate bonds,2
we seek out a qualified diverse workforce and foster an inclusive workplace3 we meet frequently with a range of advisory councils drawing on expertise in banking modeling and consumer and community finance4 we have increased transparency around our policy process and issued new reports on financial stability and banking supervision and regulation with new details about our work5 and across the federal reserve system our staff publishes a wide range of economic and policy research and plays an active role in academic discourse,0
there are only three ways by which the federal reserve can affect the excess reserves of financial institutions it can change the discount rate ie the rate at which financial institutions can borrow reserves from the fed it can change their reserve requirements ie the amount of reserves that they must hold per dollar of deposits and it can buy and sell securities in the open market,2
i further suspect that some bankers who went along with the view that loantodeposit ratios can be safely increased to 70 or 80 percent may now be having second thoughts if not real problems,2
but because we want to conserve energy and conserve lives we set a speed limit of 55 miles per hour and we actu lly driveclose to 55 miles per hour,3
it does control the supply of money more specifically the monetary base  which consists of outstanding currency and bank reserves,4
the objective is to prevent the securities affiliate from obtaining any benefits from the safety net and to assure that the bank will not draw on the safety net because of its dealings with its securities affiliate,2
unlike business spending household spending has continued to grow moderately this year despite being buffeted by changes in income wealth and consumer confidence,0
and as a central banker of a key currency country whose liabilities constitute international money i am quite willing to state my belief that inflation in the united states can only serve to interfere with grouth throughout the world,4
our goal is symmetric meaning that we dont want to see inflation run either persistently above or persistently below this goal,4
the atmosphere in the securities markets became much quieter than it was over the summer,2
all of these have added to  the list of bad debts in the hands of financial institutions commercial banks in particular,2
4 y accompany 1  are neer popular and in almost every sector of the economy you can find people who il w l argue that the overall restraint on credit growth works special hardsips on t1l1eir t 1 b  par icu nr usiness,1
because of the repeated commitment of the united  states to maintain a fixed price of gold a 35 per ounce,3
commercial real estate valuations derive from jobs among other factors so you can see the potential for a selfreinforcing dynamic that could be worse than expected,0
for example in response to instability of capital flows and the exchange rate some east asian countries such as korea and thailand began to build up large quantities of foreignexchange reserves and continued to do so even after the constraints imposed by the halt to capital inflows from global financial markets were relaxed,3
15 a what regulatory bodies state local or federal have jurisdiction over the firms rate applications and is there overlapping authority,1
it showed that 19 percent more adults remained in the familyfocused program for more than twenty weeks,0
the canadian recession of that period was only slightly deeper than that in the united states so canadas cyclical situation probably provided only a limited source of upward pressure on the current account and the exchange rate,3
as i already mentioned uncertainty about the value of assets about the creditworthiness of counterparties and about future calls on the liquidity and capital of important market participants caused liquidity to dry up in many segments of the money markets,2
some established operators incurred increased costs or operation and living that could not be sustained even on a normal market to say nothing of the low level of the last two years,1
third the system of floating exchange rates among the major currencies that prevails today relies upon appropriate monetary policies in the various countries to result in exchange rate stability,4
even in faster growing italy and the united kingdom unemployment is still in or near the double digit range,0
the most im portant of the creditsensitive industries housing deserves special mention,1
during previous upswings wage inflation approached 4 percent,0
just as you and your trustees bear  the fiduciary duty of properly managing and protecting the value of the  pensions under your administration we at the fed are charged with the  fiduciary duty of managing and protecting the value of our nations money  supply,4
some observers would not be surprised if the jobless rate climbed to the neighborhood of 6 per cent by year end,0
the redeposit proposal is based on an important technical point namely that unless the new marginal reserves held by nonmember banks with their correspon dent member banks are redeposited with a federal reserve bank these reserves will not be sterilized,2
and nost sectors are already deeply penetrated by existing lenders with considerable expertise ready to capitalize on the trend toward a checkless creditcard society,2
i trust that all of you share this sentiment and would welcome the opportunity to work with and support regional businesses in your venture and corporate growth endeavors,1
in this context even if the blending of financial functions and financial institutions does not directly and materially increase the degree of financial interdependence from what would occur in any event it may produce a situation in which it is more difficult to quickly identify the dimensions and reach of problems when they arise and to identify the circuit breakers that need to be thrown in order to prevent a particular problem from taking on systemic characteristics,2
our debate about what we dont want intermediaries and financial markets doing must be informed by a better articulated view of what we do want them doing,2
alternatively data showing capital invested per unit of,1
investing early in human capital makes sense for three reasons,0
while most rural communities continue to be relatively well served that is less often the case in communities with highpoverty rates17 in 2018 federal reserve staff members met with leaders in rural areas across the country that had recently experienced a bank branch closure,0
farm output adjustments over the course of the business cycles were found to be smaller on average than adjustments in the nonfarm sector 3   farm output decreased an average of 23  percent per year in the thirteen years of business decline,1
these may be the banks greatest contributions to the longterm economic prospects of the developing countries,2
all that said recent developments have understandably led to a substantial increase in the publics interest in the feds balance sheet and programs,4
specifically monetary policy actions determine the monetary base which is the amount of currency held by the public and the amount of reserves held by banks,4
21the challenge remainso the debt problem is still with us and it will have to be resolved ultimately in the context of growth,3
beginning around the middle of 1974 the demand for money mla at given levels of income and interest rates began to decline sharply according to board staff estimates and continued to fall until around the middle of 1977 during those three years actual money growth proceeded at an annual rate of about 512 percent,4
investors must be confident that banks are establishing sufficient levels of reserves and recognizing loan impairment in a timely fashion,2
by 1972 all except l_ in passing it should also be observed that deposits in foreign branches were also free of both us imposed reserve requirements and ceiling on maximum interest rates which could be paid,2
the capital stock and the labor force i shall begin with a few comments on the evolution of the capital stock in relation to gnp and to the labor force,0
each meeting concludes with a decisionor policy directivedesigned to achieve the objectives i mentioned earlier price stability and sustainable economic growth,4
in this environment any forwardlooking labor union or business that is exposed to export or import  7competition has to recognize that pushing hard for wage or price increases may be a disastrously counterproductive action if such increases result in a loss of markets and a loss of jobsi feel that this shift toward a more flexible wage and price structure presents an unusual opportunity to continue to restrain monetary growth to a level consistent with price stability without engendering an increase in unemployment,0
in fact investments in computers have accounted for a full percentage point of the recent growth in real gdp,1
of course there are a variety of alternative explanations for the current surprising relationship between inflation and unemployment and perhaps all of them are part of a full account,0
similarly     7 it may not feel like much of an expansion to consumers especially those who went on a borrowing and buying binge in the 1980s,0
for example how do we measure the valueadded of free digital services like facebook or twitter6          the future is as always uncertain,1
but with the fed funds rate at its zero lower bound the fed engaged in nontraditional policies to support the economy,4
congress has charged the fomc with making monetary policy to promote price stability and to promote maximum employment,3
today there appears  to be almost  nothing a bank can do that cannot be done by a nonbank bank while there remain many things  to  that  some nonbank banks can do  that  banks are not aìlowed  do,2
but i would also like to focus on the emerging longerterm challenges particularly on the need to augment our domestic saving rate to facilitate the financing of the investment that will almost surely be required as the baby boomers retire,3
prompt action by the fed and the resilience of the us economy carried us through,4
adherence to present federal reserve policy has meant that the ava,4
to be specific it was not just that there is a higher proportion of young people in the labor force today than fifteen years ago but that the characteristic unemployment rate for young people had increased as well,0
so understanding why some economies have succeeded and others havent comes down to understanding why some countries have managed robust investment in people capital and ideas,3
the increased complexity of many consumer products as well as their sale by a range of financial institutions to a larger segment of the public is arguably one of the causes of the current crisis,2
nor is it to make a judgment about the desirability of lower government spending,3
however the rise in the use of credit by lowerincome homeowners has not come without cost,0
changes in preferences can result from recognition of the health  benefits or detriments of certain types of food but the largest driver is  surely growth in per capita income,0
rates would respond to the forces of demand and supply and accurately reflect the trading positions of all nations,1
we are also aware of concerns that the current competitive balance between basel i banks and basel ii banks might be upset in certain loan markets,2
the areas in which we provide  similar services are limited to those in which we have a responsibility   15 either to the treastiry as its fiscal agent or to _the congress as the guarantor of an efficient tmiform payments system,4
this past year alone the federal reserve system sponsored more than 200 conferences and workshops on community development and reinvestment topics 6 attended by more than 11000 bankers and others,4
central bank openness allows the public and its elected representatives to make informed judgments and constructive criticisms about policies made by its central bank and to assess economic outcomes relative to specified longrun objectives,0
second financial institutions understand that it is in their best business interest to make business continuity planning an executive management issue requiring toplevel involvement and not insignificant investment,2
financial innovations have improved the liquidity of housing investments and the tax code has tilted even more favorably towards housing,0
the federal reserve has established a strong record of promoting financial stability and we will continue to work to ensure the vibrancy and resilience of the us financial system,2
in this environment the unemployment rate has fallen to 4 percent and the underlying rate of price inflation has slowed on net despite very high rates of resource utilization,0
as a country we have about 2 million fewer people working today than were working at the start of the great recession in december 2007 and the labor force has continued to grow,0
third certain basic fundamentals regarding capital measurement and capital adequacy will not change,2
greater diversification is frequently cited by the banks as being necessary to their survival and as a force for restructuring,2
the president made his first initiative on_an incomes policy on april 11 whe_n he called on the,3
indeed by statute the gao is charged with making recommendations to congress about the areas they have reviewed,3
undoubtedly the earnings on that portion of their reserves which these banks can invest would lessen the net burden of their much higher reserve requirements,2
this suggests that the vast secondary market for home mortgages has largely adjusted to the recent increases in mortgage rates,0
average assets marketings production expenses and net income per farm have all roughly doubled in the last 10 yearsan annual rate of increase of about 7 per cent,1
the first of these authorities is directed at financial firms that are not bank holding companies and thus not subject to capital requirements and other parts of the holding company regulatory regime,2
georgia outside the metro area remains at an earlier point in the transition to a post     11    industrialized economy and faces the dislocations associated with that change,1
its a pleasure to speak at the  central banking forum coorganized by bank indonesia and the federal reserve  bank of new york,4
therefore able to produce carpets fashioned virtually  to  they are  the tastes o f individual  customers while charging prices low enough to vie successfully against foreign producers with much lower labor costs,1
we look at how many net new jobs were created,0
probably the most important o f these is  population growth or more specifically inmigration,0
a system of farm credit banks for discounting paper of commercial banks has been suggested as a means of meeting the area creditdeficit problem,2
a national council comprised of the chairs of each regional advisory panel meets with the board of governors in washington twice a year,4
while gnp or national output will grow at about the same rate in 1987 as it did last year more of that increase in output will be exported and less of it will be available for domestic use,1
however his indulgence affords me an opportunity to discuss issues i have been close to for the past several months and which seem to me to be raterial to a discussion of banking and the securities business,2
15differential iffipact of netarx  fis restraint in the judgment of a really remarkable consensus of economists bankers businessmen and public officials the best way to achieve the required moderation in domestic demand is through a policy of vigorous fiscal restraint,3
at the same  time the seasonally adjusted labor force participation rate fell from 657  percent to 647 percent,0
total commercial bank loans outstanding have risen at almost a 24 percent annual rate since last july,2
ballooning expenditures have been the result,3
i should emphasize that the views expressed are my own and should not be attributed to anyone else in the federal reserve system1 monetary policy is primarily about inflation so let me begin with an overview of the inflation situation,4
i have yet to find a single economist on this planet who consistently  forecasts the economy accurately let alone projects with any precision the  interest rate on overnight funds one year out or far into the future,4
in light of these data in my view the labor market is rapidly approaching maximum employment,0
the federal reserve board has over time developed powerful econometric modeling tools to assist our understanding of the many interrelated economic forces,4
moreover it now appears that nationbuilding efforts in iraq will require additional government spending,3
the partial shutdown of the federal government is a case in point,3
thus although they will likely have problems w e should expect m o s t nonbank suppliers of f a r m credit to be able to keep pace with future demands,2
the resultant shrinking of deposits under central bank cognizance is of grave concern at a time when more effective monetary control is essential to combat the clear and present danger of virulent inflation,2
regulators had recognized these problems in some cases but did not press firms vigorously enough to fix them,1
these trends have heightened credit risk,2
it is imperative that all of us as citizens and as bankers keep abreast of legislative developments on the federal level and take whatever actions they make necessary,2
but im listening to business contacts for indications they are getting more cautious with spending and hiring plans,1
before i begin let me give the standard disclaimer the views i express today are mine alone and do not necessarily reflect those of anyone else in the federal reserve system including my colleagues on the federal open market committee fomc,4
senator nels on aldrich chairman of the national monetary commission whose investigations of central banking laid the basis for establishing the federal reserve system was deeply impressed with the need for a strong monetary authority capable of exercising discipline over the financial affairs of a nation,4
in the end the us banking agencies tried to allow as much choice as possible while ensuring that banks are still meeting domestic regulatory obligations avoiding privatesector costs that do not produce some clear and convincing level of benefits abiding by the evolving basel ii agreement and most important maintaining a safe and sound us banking system,2
durable goods production is even more concentrated here,1
transcripts of the fomcs meetings are made available with a fiveyear lag allowing researchers to study the closeddoor discussions after an appropriate time has elapsed,4
another potential advantage of gradualism is that by taking small steps policymakers give themselves the opportunity to assess the effects of their actions and perhaps to refine their views on how large a policy change will ultimately be needed sack 1998,4
these outcomes would be helpful but the effectiveness of an mbs purchase program would be amplified perhaps significantly if certain nonmonetary policies were changed,3
an institutions record of performance is also taken into account along with other factors when the federal reserve  6board decides whether or not to approve certain applications from the institution such as to form a holding company or to acquire a bankbecause of the increase in acquisitions cra has lately been the focus of increased community and state legislative interest and concernone of the concerns expressed regards the potential for banks to be less responsive to local concerns if decisions about local bank policies are made by institutions in other states,2
over the course of this recovery the unemployment rate has fallen from a peak of 10 percent in october 2009 to 58 percent today,0
the fomc typically sets a target value for the federal funds rate  the rate at which banks lend to each other in the overnight market,4
specifically i want to talk about the importance of fed independence and insulation from shortterm political pressure in the conduct of monetary policy,3
beyond the fed the bankruptcy process could perhaps be enhanced in ways that speed up the resolution process for large financial firms but retain clear legal rules about the distribution of losses and oversight by a bankruptcy court,2
they can retard or even smother adaptation in the entire financial sector of the economy,2
indeed residential investment subtracted from growth throughout 2018 and in the first quarter of this year,1
in fact it will probably be closer to the lower end of this range because of lower oil prices early in the year and ongoing import competition that is putting downward pressure on the prices of many goods,1
the advance in production technology involving the increased use of commercial feeds fertilizers insecticides and other agricultural chemicals together with improved seeds adds to productive efficiency but it also adds to the cash expense and the need for shortterm credit with all ofthe,1
nonetheless since the latest wave of nonbank acquisitions began around 1969 i know of only a handful of cases in which nonbank affiliates performance was so poor as to seriously destabilize the parent holding company or its lead bank,2
georgias    7    quality basic education program is one such initiative,0
the credit intermediation  process has become dysfunctional and as for stocks the sp 500 index has  become historically and hysterically volatile it closed today roughly 50  percent off its october 2007 peak,2
whether the extent of your business resides only within one community or extends internationally some portion of every firms year 2000 efforts must be coordinated and cooperative,1
the small bank can also develop a working relationship with a correspondent bank so that the large correspondent bank purchases loans from the small bank  when seasonal volume becomes very heavy,2
the idea promoted by former federal reserve chairman paul volcker and now endorsed by the administration is to insulate insured depository institutions from proprietary trading or similar capital market activities that are thought to pose unusually high risks for institutions or more precisely for the federal safety net provided to insured banks,2
13 and president obama said in august 2009 we will continue to maintain a strong and independent federal reserve,4
4  growth in total spending at a rate consistent  with price level and emoloyment objectives  is more important to the overall wellbeing of our citizens than are monetary actions  directed toward the welfare of special sectors,3
the massive  capital inflow from abroad prompted by high interest rates here bid up the value of the dollar by approximately 50 percent between mid1980 and early 1985  the effect was to  make our exports expensive in terms of foreign currencies while the dollar price of imports to the  us  fell,1
there is accordingly an especially great need for efficient cooperation and coordination among the various regulators that collectively oversee the financial system,2
second u s banks have more restrictions on the products they can offer often limiting them mainly to deposittaking and lending activities,2
in the manufacturing sector idle capacity has also declined sharply because capacity to produce has risen at only about two percent a yearwhile output has been increasing at an annual rate of around 15 percent,1
this is of course presently true statistically for even bank holding companies that have aggressively sought nonbank acquisitions still have most of their assets in banking,2
also since there is a tradeoff between inflation and unem ployment we must be prepared to accept at least a temporary rise in the unemploy ment rate even after the energy problem is solved and to use special programs to ease the plight of those affected,0
i can say without contradiction that this is a period of unique challenge for your industry and for banking and thrift regulators and i would like to focus ray remarks on the new approaches these times call for from both regulators and management,2
for innumerable reasons state planning simply cannot deliver the goods and services people seek,3
somehow the monetarist view of milton friedman doesnt seem completely convincing either,4
in midseptember the atlanta fed held a oneday conference on commercial real estate involving investors developers bankers and academics,4
there is nothing intrinsically wrong with broadening the tax base beyond the payroll tax but there is a potential problem in breaching the trust fund limits,3
the fa c t is at least so far as we can measure and there are problems in measuring income as you know minnesota has been below the national average on per capita income fo r many many years until just the last couple of years,0
at the federal reserve we are preparing our communications system for the payments mechanism of the future,4
in su ch an e n v iro n m e n t firm s a r e b ein g c a u tio u s a b o u t n e w hiring a n d so u n e m p lo y m e n t p e rsis ts a t a high le v e l w h ich in tu rn re s tra in s sp e n d in g ,1
some of these services such as legal and accounting services are closely connected to success in financial services trade,2
had house prices kept appreciating loantovalue ratios would have fallen and some borrowers would have been able to refinance perhaps into a prime loan with a lower interest rate,0
following a period of rapid productivity gains during the 1950s and 1960s the economys performance during the 1970s appeared out of line with previous experience,1
indeed i believe it is very difficult to make the case that its an acceptable risk for a bank to lend to a corporation longterm at a fixed rate to guarantee its commercial paper to provide it a longterm letter of credit to engage in interest rate swaps with it and tounderwrite its securities in london or tokyo but not to permit that same bank organization to underwrite the same corporations stocks and bonds in the united states,2
there are also great opportunities to more closely integrate fouryear and community colleges in ways that promote efficiency and better serve students,0
three such indicators that i will briefly discuss are access to credit rates of homeownership and small business development,0
a shift toward a more normal propensity to purchase rather than to save can enlarge sales and raise profit margins encouraging business to spend for expansion of its capacity to produce,1
in addition this explanation is consistent with many anecdotes from businesses about efficiency gains as new technology is put into place,1
using total reserves as the daytoday operating target which the federal reserve has never done would be a very direct approach leaving little scope to the market,2
it is certainly reasonable to assume that exotic or at least exotically named derivatives are riskier than singlefamily mortgage loans,2
measured productivity growth consequently declines when the economy enters a recession,1
first firms are continuing to benefit from the accommodative stance of monetary policy,1
in the fourth quarter of 1993 banks had unrealized gains of 115 billion,2
but there has been a lot of concern over the decline in participation,0
and this simple fact is one   6 of the many reasons for the growth of multipleoffice banking the bulk of bank customers are no longer business enterprises  located downtownunless we wish to impede seriously our economic progress we must bow to change and reality exemplified in such developments as these,2
there are  many possible sources of mismatchgeography skills demographyand they are  probably all at work,0
no one can predict with much confidence exactly when recoveries in demand will take hold in the troubled foreign economies,1
the word inflation is in quotes because at the time and since not all analysts have been in agreement that this was a period when fiscal and monetary policies should have been constraining growth and employment,0
part of our rationale for approving the dual ihc structure was the enhancement of recovery and resolution options of the global firm,1
consequently capital flowed rapidly into the united states helping to fuel large appreciations in stock prices and in the value of the dollar,2
yet there is something special about the federal reserve,4
however state member banks are also relatively much more important than insured nonmember banks,2
its impossible to know  exactly how and when workers and businesses will be fully back to work and when  consumers will return to the businesses that are open,0
this makes workers more of a bargain for employers causing an increase in hiring,0
6237796 return to text   10 see board of governors of the federal reserve system 2012 annual companyrun stress test requirements for banking organizations with total consolidated assets over 10 billion other than covered companies final rule docket no,2
it also implies and i cant emphasize  this too strongly a scaling down of rhetoric of public promises of expectations so that public officials and policy are believable and therefore worthy of support,4
in my view such an agreement could unleash consumer and investor confidence that would lead to healthy economic growth without reiflation,0
i believe the answer is that we sometimes expect more from monetary policy than it can deliver,4
page 5  it is also essential to the transition to exportled growth that we avoid protectionist  legislation that might provoke a trade war and lead to a  contraction in world trade,3
this consumer credit backlash has contributed to the adoption or proposal of several legislative or regulatory changes in recent years,3
third cra does not require banks to make loans at belowmarket interest rates or under terms and conditions inconsistent with safe and sound lending,2
another director said of the current financial turmoil when you swim in the ocean you dont know whos naked til the tide goes out,2
nonetheless market reactions to the announcement of the emergency facilities anecdotal evidence and a number of the studies we do have suggest that the facilities forestalled potentially much worse outcomes and encouraged improvements,2
and as you build up the rules and regulations dealing with that exception you end up with a mountain of pamphlets describing the various rules and regulations relating to thousands and thousands of products and services,3
the great  inhibitor of job creation is the uncertainty over taxes and spending and  regulation that plagues businesses,3
but community banks do have some key advantages,0
parity in how applications are considered without regard to race sex or other prohibited bases is absolutely essential in our country,0
small businesses rely on banks not just for a reliable supply of credit but for transactions and deposit services as well,1
pillar 2 of the new accord provides a consistent framework for improving supervisory assessments of capital adequacy and risk management,2
here let ne digress for a moment to make this assertion which i believe to be true that the increase in the productivity of human labor en wh,0
just as balance sheet policies are a natural step when the policy interest rate is at zero higherpowered communication methods are a natural step as a complement or substitute for balance sheet policies,4
but as ill discuss the idea behind qe  is that the yields on those longterm treasuries will affect yields on all  longterm securities,4
hence policymakers may have unwittingly contributed to accelerating inflation that reached double digits by the end of the decade as well as undesirable swings in unemployment,3
also congress recently authorized the federal home loan bank board to permit s  ls to offer billpaying services for their saversfourth savings banks and s  ls have become more like commercial banks in the kinds of loans and investments they are authorized to make,3
as you well know the progress weve made toward price stability has been at great cost including a severe economic contraction,4
as competitive pressures have intensified community banks have used a variety of tools to maintain a competitive edge,2
the number of job openings is at its highest level since the start of that data series in 2000 and the statistics show more posted job openings than unemployed workers,0
the scores of smaller stockholders had looked to him for years to run the bank and were easily swayed,2
this should empower consumers to make better informed choices and improve competition,0
these studies find that policy differencesin particular the expansion of paid leave following childbirth steps to improve the availability and affordability of childcare and increased availability of parttime workgo a long way toward explaining the divergence between advanced economies44 evidence suggests that if the united states had policies in place such as those employed in many european countries female labor force participation could be as high as 82 percent45 however these policies entail tradeoffs,0
conclusion in conclusion id just like to say that the output gapand its resultant elevated unemployment and excess capacityis just one in a long line of challenges that the countr y has faced in its economic histor y however to its credit time and time again our economy has proven itself resilient in the face of these shortter m challenges,0
so when i was invited to  speak to you about the international economic situation generally and the prospects for swedishamerican investments in particular i was delighted to accept,1
controlling bsaaml risk continues to be a primary concern for banking organizations,2
for example a foreignowned us bank may decide to begin to offer consumer mortgage lending or investment advisory services,2
given this relatively moderate pace o expansion it has been difficult to nudge unemployment down to the more acceptable 6 t    2   6 12 percent range from the 7 percent mark where it remained lodged for most of tl year,0
growth occurs not only because  we have more people working or more machines or in economic terms more labor  and more capital but also because technological advances make existing  workers more productive,0
although the fomcs ultimate objective is to provide the appropriate degree of financial stimulus to the economy the committee has no direct control over the key interest rates and asset prices that jointly determine the extent of financial stimulus as i have already noted,3
on the export side global markets are somewhat less important than in many other regions of the united states,1
but i hope to convince you  that taxation is the best way to meet all five objectives,3
in the us  fedwire is a realtime gross settlement system,4
nonetheless if the recent morefavorable economic developments gather momentum uncertainties will diminish risk premiums will fall and the pace of capital investment embodying new technologies will increase,1
obviously however central bank policy action  with respect to reserves has direct influence on interest rates if supplydemand relationships have any meaning,4
conceptually one might say public policy acting through govermnent may institute a federal credit program only when imperfections in the working of the pivate financial sector are causing a suboptimal allocation of funds to a given activity or when it is socially desirable to encourage the expansion of that activity beyond the limits of an efficiently working market system,3
the central bank of canada also has a 2 percent inflation target,4
in doing so there are lessons they can learn from advances in risk management strategies developed by major financial institutions,2
few recognize the complexity of our existing financial system,2
effected in early 1965  had a tax rate increase been  the actions of december could have been modified,3
the higher policy rate path that is higher  rc causes the longterm interest rate panel a to rise which in turn induces the real exchange rate to appreciate panel b,4
so what additional steps can we take to increase transparency,4
financial institutions are required to determine credit needs develop products to help meet those needs and market those products equitably through the communities they serve,2
footnotes  some reserve banks also have branches,4
actions that reduce current tax revenue without decreasing either present or future government expenditures do not constitute a reduction in actual tax burdens,3
now in a movement that will probably not become a major short run trend three states7 have chosen to permit entry by out of state bank holding companies,2
the congressional budget act of 1974 requires a listing of tax expenditures in the budget,3
we have reached this level of high productivity not without a good deal of pain but i am convinced that the investments businesses are making today will create greater opportunities for growth in the future,1
today about 25 billion in federal reserve repurchase agreements is outstanding,4
while i expect retirees to continue coming to florida in 1991 their numbers should be diminished somewhat,0
this approach would be operationally convenient but would also leave the size of the balance sheet and reserves larger than necessary most of the time,4
economic growth in the past decade was boosted by households taking on more debt coping with that debt is holding back growth today,0
were doing everything we can to help people get through a really painful time,4
starting with inflation we aim for an average of 2 percent,4
bank technology vendors are playing an important role in facilitating change,2
they likely will fall back once the incentives are reduced but in any case the surge signals that households are still willing to make large longterm commitments despite the uncertainty and risks of a recession,0
this threat  could well lead to continued declines in bank lending which would curtail the  recovery,2
given the enormous agenda of unfinished business we have at home including the elimination of poverty and ignorance the eradication of racial discrimination and the rebuilding of our cities a substantial proportion of the public clearly has concluded that this energy and imagination can be employed far more productively in the effort to cope with thepervasive ills in our own midst,3
and it may be lower because of the jarring changes such as job losses,0
im told that overinvestment was especially the case in the telecom sector where different competing standards led to duplication and overinvestment,1
there should also continue to be heavy emphasis on the performance of services for a fee in order both to offset the economization of demand deposit balances to which i referred before and to insure enhanced profitabilitywe can anticipate that additional efforts may be made to create instruments attractive to investors and rewarding to banks,2
taking this approach in the us context could help to reduce the cost that the largest banks face in offering clearing services to their customers,2
for the nation as a whole community banks today account for almost 20 percent of banking assets,2
the spirit of neighborly helpfulness motivates volunteer workers,0
more recently vayanos and vila 2009 study a preferredhabitat model in which short and longterm assets are imperfect substitutes in investors portfolios and the effect of arbitrageurs is limited by their risk aversion or other market frictions such as capital constraints,2
for one thing the debt service burden will be that much larger,3
i plan in these remarks to give most attention to employment or more to the point full employment,0
the intense volatility in financial markets that we saw at the end of last year and the beginning of this year has subsided,2
conservative estimates suggest that the net effect of y2k remediation efforts might shave a tenth or two a year off the growth of our nations overall labor productivity and a more substantial effect is possible if some of the larger estimates of y2k costs turn out to be accurate,0
rather than fight against all change many now focus more on trying to shape the new interstate laws to maximize their opportunities in a less regulated environment,3
in particular policymakers who see the deterioration in labor market performance as reversible using monetary policy will typically favor more accommodative policy than those who view the deterioration as more protracted,0
we can put policies in place that will support labor force participation and give us the best chance to achieve broad and sustained increases in productivity and thus in living standards,4
the polarization of job opportunities in the us labor market implications for employment and earnings pdf,0
in britain holland and belgium 1986 is likely to be the fifth straight year of doubledigit joblessness,0
if that is so then our standard of living will increase more slowly going forward,0
in        3the early 1960s banks began issuing negotiable certificates of deposit and security dealers developed a secondary market for large cds,2
but published unemployment rates during covid have dramatically understated the deterioration in the labor market,0
of course while the current approach allows for an ad hoc consideration of the particulars of each activity it still requires at least a general filter for identifying sources of systemic risk,2
disclosure rules that are built too rigidly while risk management processes continue to evolve may make them less effective in describing the risk profile of a specific organization,2
the general topic of free banking can be thought of as dealing with how an economic and financial system would operate in the absence of state interventions such as a central bank,2
indexlinked government debt could provide  information that might help monetary policymakers do exactly that,3
what we should want is a system that permits the united states the euro area and japan to pursue policies to achieve domestic objectives without generating wide and unsustainable swings in exchange rates,3
to summarize briefly the acts major provisions it would allow the board to deny an application by a foreign bank that proposes to establish an office or buy a bank in the united states unless the foreign bank meets the same standards regarding financial and managerial strength as are applied to us banks to take into account various factors in approving any applications including whether the foreign bank is subject to consolidated supervision by its home country authority and whether us bank regulators will have adequate access to information from the bank and its affiliates to determine compliance with us law to terminate the us activities of foreign banks for violations of law or unsafe or unsound practices to coordinate with other regulators and supervisors in examining simultaneously the nationwide offices and subsidiaries of a foreign bank and to cooperate more fully with foreign  regulators in sharing information on banks that are operating internationally,2
the sooner a troubled firm enters bankruptcy the more likely that it can be reorganized or wound down without a bailout,1
lsaps have other drawbacks not associated with forward rate guidance including the risk of impairing the functioning of securities markets and the extra complexities for the fed of operating with a much larger balance sheet although i see both of these issues as manageable13 in deciding to employ lsaps the fomc has accordingly remained attentive to the possible costs and risks as well as to the efficacy of this less familiar tool a point the committee has regularly noted in its postmeeting statements,2
in august the bureau of labor statistics bls announced that job gains over the year through march were likely a halfmillion lower than previously reported,0
banks do exist  as creatures of the law  state and federal with however  the right of  congress paramount over the states,3
it is extremely important that we maintain a financial system that is able to withstand the inevitable shocks and surprises,2
the vulnerabilities created by misaligned incentives and product complexity in the mortgage market were largely disguised so long as home prices continued to appreciate allowing troubled borrowers to refinance or sell their properties,0
as a central bank concerned with economic efficiency the  federal reserve has an obligation to encourage the transition to electronic processing,4
functioning of the commercial paper market has greatly improved,2
further these are relatively young products and the markets in which they trade often do not have deep liquidity,2
if we assume as i do that bankers are predisposed to lending because without lending there can be no profit then it is important to understand what stands in the way of lending to small businesses,2
this is no small accomplishment by achieving price stability the federal reserve can reduce at least some of the uncertainties that businesses face laying the foundation for a more efficient and consequently more prosperous economy,4
while our new payments paradigm brings with it vast alternatives for the users of the system it also presents some difficult challenges for our industry,2
shortterm market prospects  let me now say a few words about the prospects for the credit markets in the period immediately ahead,2
practically speaking a financial institution more or less continually makes risk decisions the circumstances of which can vary substantially over time across asset classes and even contemporaneously in a single asset class based on the differing circumstances of borrowers or counterparties,2
during the 1990s the percentage of people in mississippi aged 25 or older with a college degree increased by more than 4 percentage points to 187 percent,0
a third broader lesson from this event is that the regulatory framework for banks constructed after the gfc with the refinements and recalibrations we have made over the last few years held up well,3
households increasingly choose to purchase goods and services online using existing card and ach networks,0
we know the conditions under which  capital account liberalization turns out well for emerging economies but the  trilliondollar question remains is china ready to face the full implications  of these reforms,3
concerns about potential shortfalls in investment certainly have contributed to recent recordhigh longterm futures prices,2
it is a type of response that would indeed be of benefit to the federal reserve board and system as well as to the public at large,4
14to sum up this brief review the improvement in the us bilateral balance with europe in 1970 depended mainly on a favorable shift in capital flows that at midyear was already showing signs of petering out and on an enlarged trade surplus that reflected in large part a favorable cyclical situation even though temporary faccors may have contributed a good deal to the abrupt worsening in these trade and capital transactions with europe so far this year the underlying trend was clearly adverse,3
once the recent crisis was triggered in early july with thailands eventual forced abandonment of its exchange rate peg it was apparently the lethal combination of pegged exchange rates high leverage weak banking and financial systems and declining demand in thailand and elsewhere that transformed a correction into a collapse,2
the survey covered the practices followed by federal reserve member banks which began bank credit card plans between june 30 1968 and the end of august 1969 the results are summarized in plans were effective in the 1950sand no problems have been encountered,4
cyclical behavior of productivity the behavior of productivity is greatly influenced by the phase of the business cycle through which the economy might be passing at a particular time,1
nationwide graduation rates however stand at 50 percent and it is not unheard of to find schools with graduation rates of 20 percent,0
countries have joined regional free trade zones,3
because most government expenditures are not purchases but transfer payments  social security benefits medicare interest on the public debt et cetera  government actually accounts for a relatively small percentage of gdp about 17 percent,3
the ideal central bank lending policy would require making clear distinctions between different possible sources of bank or financial distress,2
by the fall of 1979 financial markets were gripped with inflation fever,2
throughout history many nations  when confronted by sizable debts they were unable or unwilling to repay have  seized upon an apparently painless solution to this dilemma monetization,3
for the first nine months of these results  10  1962  banks with less than 5 million in deposits showed  per cent of these small banks reported actual declines in time  deposits about onefourth of such banks had gains of between zero and onethird had gains of between of  20  10  and  19  9  per cent  per cent and about threetenths had gains  per cent or more,2
barring any meaningful reform and given the current trends what is likely to happen to the banking industry over the next several years,2
in part this shift happened because of complementary research that showed how demolitions might work in tandem with other measures to deal with distressed housing,0
for a discussion of the dangers of such accelerationist monetary policy see charles i plosser the outlook and the hazards of accelerationist policy speech to the university of delaware center for economic education and entrepreneurship newark de february 14 2012,4
in banks with less than 5 million in total deposits coverage was 86 per cent of total deposits in banks with 5 to 25 million 79 per cent,2
although the bankruptcy rate remains elevated it has edged down on balance in recent months likely because of the pickup in economic growth in the united states since mid2003,1
nonetheless the amendments language is sufficiently clear to commit the fed firmly to attaining price stability in a specific time frame and hence contains all the ingredients necessary to enhance the systems credibility,4
thus we will continue to monitor cryptocurrencies as they evolve with particular vigilance for any signs of growing materiality to the broader financial system,2
if a net importing country finds financing for its net deficit too expensive that country will of necessity import less,3
thus in the sixties banks have increased their share of the credit market by nearly 50 per cent,2
if monetary and fiscal policy hold to their present coursea 5 12 percent growth rate for the money supply no change in tax rates and a 305 billion total for federal expenditures in fiscal year 1975 then the most likely prospect for the economy till mid1975 barring any further change in oil and farm commodity prices is for continued negative real growth a rise in the unemployment rate to above 6 12 percent and a decline in the rate of inflation as measured by the gnp deflator to approximately 7 percent,0
the upper income groups would get  a tax reduction of 21 per cent versus a higher those in the lower groups,3
the npr is expected to be issued in the federal register once all of the us banking agencies have completed their individual review and approval processes at which time it will be âCofficiallyâ out for comment,2
the recently completed supervisory capital assessment program scap of the nations 19 largest bank holding companies both confirmed and advanced the utility of this supervisory technique,2
believing that the international financial community will support these economies in part by backstopping the obligations they incur induces investors to commit more than they would otherwise,2
second policymakers felt forced to confirm those expectations because they believed failing to rescue creditors would cause a disruptive adjustment of expectations regarding support for other entities,3
as new providers enter the field well need to focus on the risks rather than on the type of entity providing the service,2
temporary benefits conferred on young people and minorities would only leave a legacy of bitterness once the distortions of inflationary stress caµsed the bubble of prosperity to burst as i have no doubt would again be the case,0
this is a long quote so bear with me as it perfectly  captures the circumstances that led up to our current predicament every now and then the world  is visited by one of these delusive seasons when the credit system   expands to full luxuriance everyone trusts everybody a bad debt is a thing  unheard of the broad way to certain and sudden wealth lies plain and open and  men  dash forth boldly from the facility of borrowing,2
each of these reactions is what one would predict as the result of the normal operation of a free enterprise system,1
onecountry issues in this openeconomy world monetary questions can be grouped naturally into those affecting the operation of one central bank a bank that recognizes that the economy is open and those involving interactions between many economies and central banks,4
moreover such act ion would contribute to exchange rate stability especially if germany and japan ultimately adopt a tax policy that improves their growth potential,3
according to the bls nonagricultural payroll employment in the benchmark monthmarch 2006was revised up by 752000 an unusually large revision,0
in another research finding by my banks  httpwwwclevelandfedorgfor_the_publicnews_and_mediaspeeches2013pianalto_20131106bcfm4292014 11633 pm  housing in the national economy a look back a look forward  november 6 2013  federal reserve bank of cleveland economists we learned that the decline in housing prices posed a significant constraint to small business borrowing,0
the result has been a shift in the preference of analysts and investors away from equities and toward bonds,2
the problem is how to keep economic growth so orderly that industry and commerce can provide increased jobs goods and services without the interruptions that accompany violent dips,0
on the one hand with an increase in the fraction of unemployed workers likely facing difficult job transitions there could be somewhat less slack in the economy than the current unemployment rate would ordinarily suggest,0
in good times volatility declined and value at risk along with it,2
such lower rates would tend to increase credit  flows through the established savings institutions and provide more  efficient credit sources to farmers,0
692 december 2000  return to text   7 although increased flexibility apparently promotes resolution of current account imbalances without significant disruption it may also allow larger deficits to emerge before markets are required to address them,3
reductions in the cost of directional fares to the u s were also initiated by international air carriers and steamship lines serving the north atlantic routes,1
since the beginning of 2009 texas exports have grown more than 70  percent while the nations exports sans texas have increased at half that  pace and are only now back to prerecession levels,3
the opportunity for such diversification is a desirable consequence of the strengthening of the  3worlds financial markets,2
as community bankers you have worked hard to develop a deep understanding of your local economies while also keeping perspective on the broader economic picture,0
the con  ventional view is that interest rates will rise further and so disintermediation will cut into housing as 1978 progresses,0
interest rates may alter the desire to consume or save,0
and i promise that their voices will be heard in washington when policy issues that may affect the ability of community banks to thrive are under consideration,3
and to attract capital a private sector environment in which property rights are well established and tax rates and regulations do not overburden investment is essential,3
i recognize the uncertainties in the business outlook as the budget is debated,3
tourism is an important industry across the southeast especially in florida as you might expect,1
currently the market appears to expect the initial tightening to occur later in the second half of the yearlet me emphasize that even though im a participant in the feds fomc policy meetings i really have no better idea what we ultimately will do with policy this year than others,2
having now been immersed for the last two years both in the practice of supervision and in the complementary relationship between the regulatory and supervisory processes i realize that this wasnt true then and is certainly not true now,2
adam smith said all money is a matter of belief and it naturally follows that all financial systems are a matter of trust,2
a flexible rate does not require major central bank or government actions in the foreign exchange market,3
in some areas of the country housing activity is showing signs of life while in others it remains deeply depressed,0
currently the volume of securitization is far below mid2000s levels with much of the decline reflecting the collapse in private residential mortgagebacked securities,2
monetary  policy can compensate for the increased velocity of circulation of money that is implied in a more efficient use of existing deposits and existing capital,4
and they are just two of the many federal reserve bank presidents and officials who have worked to foster and improve economic education with the national council over the years,4
from  2006 to 2009 we saw a marked deterioration in labor market performance,0
there were undoubtedly many imprudent even reckless practices associated with the securitization process particularly with respect to some exotic instruments whose risk could not be understood even by their creators,2
neutral  it is impossible to think that spending by government  in economic terms  spending  and that the sheer size of direct government  along with o ther governmental  influence on investment decisions  has no effect on the a lloc ati on of resources,3
even the most intensive supervision cannot make sure that no bank will ever suffer losses large enough to wipe out its capital,2
on the basis of a thorough analysis the federal open market committee  last february adopted targets for 1982 that we felt on the basis of experience should provide enough money to support economic recovery consistent with continued progress against inflation,4
work satisfaction and thus motivation is still in part money motivated that is real money wage or salary and that is precisely where inflationary expectations enter the productivity equation,0
at the same time our interest is in ensuring that banks understand and manage their risks when introducing new technologies or partnering with fintech companies and that consumers and small businesses remain protected23 this is why the federal reserve has been engaged in a broad and multidisciplinary effort to develop a robust understanding of the technologies and activities in this space in order to study fintechs opportunities and risks and assess policy and supervisory implications24 fintech is also one of the factors driving calls for regulators to modernize the community reinvestment act or cra as technology changes how financial products and services are accessed,2
the fomc has emphasized that it is prepared if necessary to move more aggressively to protect the relatively low rate of core inflation that now exists,4
monetary policy can nonetheless affect nominal exchange rates by influencing inflation expectations,4
i suppose no one was fully satisfied that the new measure gave us the optimal degree of fiscal restraint or the ideal division of restraint between higher taxes and expenditure reductions,3
monthly payroll job growth has averaged 204000 over the last year and 232000 over the last three months,0
and people who have struggled to stay in the workforce in the past are getting new opportunities,0
milwaukee abounds with successful publicprivate partnerships,3
the fraction of 18 and 19yearold high school graduates who are enrolled in college rose from around 50 percent in 1980 to nearly 70 percent today,0
indeed corporate net bond issuance was negative in may,1
however given the current exchange rates and the marked improvements in productivity that japanese industry has achieved there is little prospect that the external surplus will vanish soon,1
this lets them address what can be some of the most difficult barriers to education housing and food insecurity transportation technology child care and mental health,0
to provide the most effective education curriculums should also have clear standards and goals,0
flexibility or less charitably lack of control in budget practice has been a main cause of their proliferation,3
from 2006 through 2010 just over 45 percent of workingage native americans on reservations were employed compared with almost 60 percent of all workingage americans,0
the first reason centers on a decline in  the effectiveness of the nuts and bolts of federal reserve actionsits open market operations,4
the amount of federal government debt held by the  private sector has gone up by over 30 percent since the beginning of 2008 this  debt can only be paid by tax collections or by the federal reserves debt  monetization that is by printing dollars to pay off the obligations incurred  by congress,3
the fsbs evaluation shows that systemically important banks remain very complex highlighting the importance of resolution planning,2
each agency is concerned with some facet of job safety environental purity safe products 1r1ei overall consumer protection,3
the most recent data from the survey reveal a good newsbad news picture of the financial status of households providing evidence that we need to reach further to engage those who have not been able to participate fully,0
this large net outflow of blacks is in sharp contrast to the sizable net inflow of whites to the south,0
but as it turned out the financial services industry and the us economy went through a revolution,2
the federal reserve is reaching out to communities around the country to hear how americans are experiencing the economy day to day and to make sure we are carrying out the monetary policy goals assigned to us by the congress in the most effective way we can2 the congress has assigned the federal reserve to use monetary policy to achieve maximum employment and price stability,4
at the federal reserve commercial checks rose 38 percent from 1975 to 19803over the past decade the ach has developed operational procedures that provide a number of significant advantages to banks and their customers for both credit and debit transfers,4
the labor market is another potential arena for adverse spillover effects from the housing market,0
central bank independence and transparency evolution and effectiveness european journal of political economy vol,4
finally our international payments imbalance requires an antiinflation strategy that promises to enhance the competitiveness of our products in international markets,3
the referendum outcome surprised many observers me included,3
deposit insurance has been hugely successful with respect to what most americans regard as the bottom line no insured depositor has ever lost a penny in a depository institution in the 65 years deposit insurance has been aroundall well and good,0
it is also possible that there is not much subsidy in cra loans so that again banks might have made loans available on similar terms even in the absence of cra,2
while we have been catching up a little southerners on  average have attained few er years o f schooling and have a higher rate of functional illiteracy than is the case elsewhere in the nation,0
notably to promote financial stability and to address the extremely serious problem posed by firms perceived as too big to fail legislative action is needed to create new mechanisms for oversight of the financial system as a whole to ensure that all systemically important financial firms are subject to effective consolidated supervision and to establish procedures for winding down a failing systemically critical institution without seriously damaging the financial system and the economy,2
i say additional leeway because many banks were not using what leeway they had and were reluctant to see more added,2
ample liquidity has been provided to the economy as measured by the high growth rates of monetary aggregates from august through the end of last year,4
our directors constantly help us improve the level of centralbanking services in the most costeffective manner,4
however american industry competes with manufacturers in europe and japan where banks are positioned to provide these kinds of services to businesses regardless of size and location,1
among the cdos that invested in subprime mortgagebacked securities it was common for a single cdo to own hundreds of different mortgagebacked securities each with its own pool of underlying mortgage loans,2
other financial assistance programs  given the importance of small businesses to our economy and our communities it is hardly surprising that a broad array of other financial and technical assistance programs have been created to foster small business growth,1
what part of the treasury borrowings should be on a longterm basis,3
but households generally need some kind of capital of  their own to initiate a startupand so the fall in household net worth and  wealth makes starting new firms more challenging,0
i rotate annually with the president of the cleveland fed and im serving as a voting member this year,4
in the sixties monetary action was seen through its impact on credit flows and interest rate levels,4
the problems of declining productivity as well as the rise in unemployment were also exacerbated during the second half of the 1970s by a rapid expansion of the labor force caused by the coming of age of the baby boom generation and the increasing desire to work on the part of women,0
unfortunately this means tha_t the economy must pass through a period of possibly intense pressures in financial markets,2
the bulk of the losses reported by the major derivative houses for the financially turbulent third quarter of last year reflected declines in the market values of their underlying trading positions especially in equities commodities and emerging market debt,2
now ill turn to employment something i know many  of you as business leaders watch closely,0
over the entire postwar period however the federal government has been the one sector which has sharply reduced its debt relative to its income,3
at the same time i viewed both the implications of the june jobs report and the outcome of the brexit vote as uncertainties with some resolution over a short time horizon,0
job growth has been solid in recent months,0
but i am also conscious that tax reductions however rationalized on structural or cyclical grounds will be counterproductive if they simply add to our chronic deficits over time place still more pressure on  11 interest rates and feed inflation,3
for example there are now some early signsand there is cer tainly a needfor more multiyear budget planning by the administration and the congress,3
3  and it is up to the public sector to provide ample opportunities for all americans to participate in the private sector equally and on fair footing,3
there has also been clear progress toward maximum employment,0
adding banks as competitors in the markets for these services may simplify their task of managing their financial resources,2
thus banks with less than 100 million in assets should be viewed as a key source of dynamism and competition within the banking sector,2
however apart from some speedups of tax payments no additional fiscal restraint was introduced until this fall when certain tax incentives to business investment were temporarily suspended,3
of  as  subsldies attrlbutable  the recent debate about  the appropriate response to bank involvement ln leveraged buyouts lbos lllustrates the dlstinctfon between these two approaches some people are urglng  that  bank involvement  ln  lbos be regulated  6    restricted or precluded,2
a commitment by the united states congress to price stabilify would reduce the political pressure to deviate from that goal,3
in addition studies at our bank and elsewhere provide compelling evidence that the federal reserve can exercise a closer control of m1 because of regulation q than of other monetary aggregates,4
to illustrate suppose that the fomc did not adjust policy gradually but set the federal funds rate at each meeting precisely as needed to offset the effects of shocks to the economy,4
michael moskow speeches  1999  r the theoretical foundation for the narrow goals of these central banks is that monetary policy cannot keep economic activity above its sustainable level but monetary policy can keep inflation permanently low,4
they need to decide their product mix…should they focus on the wholesale market the retail market the middlemarket or be an even more specialized niche provider,1
information about the feds policy goals its assessment of the current economic situation and its strategic direction will influence financial markets expectations and move market interest rates in alignment with appropriate fed policy,2
that initial experiment helped stabilize financial markets and shore up our banking system at a critical and uncertain time,2
i strongly agree with one aspect of this argumentthe notion that an accommodative monetary policy left in place too long can cause inflation to rise to undesirable levels,4
21 in the event of an economic downturn and some creditquality deterioration the reduction in bank brokerdealer inventories and marketmaking capability could mean that credit spreads might widen more significantly and potentially in a more volatile manner than they have historically,2
it is not stretching things to call this a revolution in central banking,4
another difference this time is that the flow of savings to financial in stitutions and thus the capacity of these institutions to accommodate credit demands has been very large while direct investment by savers in stocks and bonds has remained relatively moderate,2
or the needed fiscal adjustments could come as a rapid and much more painful response to a looming or actual fiscal crisis in an environment of rising interest rates collapsing confidence and asset values and a slowing economy,3
this morning id like to explain the policy challenges facing the federal reserve review recent economic developments and talk about the outlook for economic growth and inflation,4
according to a recent georgetown university study these can make a meaningful difference in enrollees careers certificates in engineering technologies can lead to high earnings as do those in fields like information technology and legal studies,0
clearly banks roust have policies and procedures10 10  banking and financial system and must remain intimately involved in understanding and addressing its problems as they arise,2
if unemployment reaches the 7 percent range that would constitute a substantial improvement from the 81 percent unemployment rate that prevailed when the committee announced the current program of asset purchases,0
therefore it is imperative that bankers exert their best energies and judgment in managing the acquisition and  14 administration of loans,2
such supervisory information can and does make a valuable contribution to monetary policy analysis,4
this increase in cost of production  will raise prices and before you know it price pressures here and everywhere become strong and general inflation sets in,1
this year the figure has been lower as a percentage of the population than at any time in the history of this series which goes back to 1970 should the pool of available workers continue to shrink there is a point at which this safety valve for excess demand will effectively close  even in the face of accelerating productivity,0
but i can point out that this quest has also involved a method of financing of government expenditures which in my opinion is inconsistent with the goals themselves and with the survival of our  economic and political institutions,3
but most importantly the growth rate in real federal spending is now less than 1 percent and therefore there is hope that further progress will be made in reducing the size of the deficit,3
for example at his first meeting as chairman in 2006 ben bernanke wanted to increase interactions among participants at the fomc meeting so he introduced what he called a twohanded intervention,4
as a result even absent a further deterioration in sales residential construction would probably decline further in the months ahead imparting a significant drag on overall growth in real gross domestic product,1
these adjusted financial intermediation data however do not tell the full story,2
one community might have better elementary schools another more employers and another the regional airport,0
at that time the federal reserve presumably would begin to shift our portfolio back toward the treasury market,3
for now the budget deficit seems to have topped out,3
consumer spending grew at a robust of  1983,0
the effects of budget deficits also depend in part on the savings pool not just in the us but in the rest of the world,3
but i do not believe that special factors alone can explain away the tension between an unemployment rate persistently below traditional estimates of nairu and the stable to declining inflation over the past two years,0
nonetheless banks still have more to do to restore their health and adapt to the postcrisis regulatory and economic environment,2
19 also to repeat myself policies to boost productivity growth and the longerrun potential of the economy are more likely to be found in effective fiscal and regulatory measures than in central bank actions,3
certainly the discipline the fed is willing to impose today is a great deal less harsh than that it inflicted in the 1920s and 1930s,4
but the repercussions of the financing of these government expenditures have created grave problems,3
thats  current satisfactory inventory conditions  however also mean that we cannot expect the economy to get the stimulus from inventory rebuilding it did in 1976  so  altogether the business sector will probably not provide the degree of thrust the economy needs,1
to check the relative decline of the banks in this field and to enhance their role in the future a number of critical changes are required since the correspondent banking system is becoming less able to  member board of governors of the federal reserve system,2
we will continue to work toward improving our ability to detect and address vulnerabilities in our financial system,2
encouraged by the security that experience suggests some bankers moved into riskier assets attracted by higher returns,2
i like to tell people that  the fed is a uniquely american institution,4
the role of accelerating labor force growth may not prove to be as lasting as productivity growth through new technology,0
return to text 3 see roisin mccord and edward simpson prescott 2014 the financial crisis the collapse of bank entry and changes in the size distribution of banks  federal reserve bank of richmond economic quarterly vol,2
if we decide to pass the burden on to future generationsthat is if we neither increase saving now nor reduce the benefits to be paid in the future by social security and medicarethen the children and grandchildren of the baby boomers are likely to face much higher tax rates,3
larger institutions hold a greater share of their assets in longterm instruments and have also seen an increase in longterm assets over the same period,2
the jobless recovery also led economists to debate the extent to which the lack of hiring overall and the continued decline in manufacturing jobs specifically represented structural changes that is changes that were not likely to be reversed as the recovery strengthened,0
and in the ensuing economic contraction they have lost their jobs at a higher rate,0
observers have pointed out that rates on financial instruments typically priced below the overnight rate such as liquid deposits shares in money market mutual funds and collateralized borrowings in the repo market would be squeezed toward zero as the policy rate fell prompting investors to seek alternatives,2
to be sure we may wish to keep overnight rates low  for a prolonged period depending on economic developments,4
of course the business recovery itself will in turn bolster employment disposable income and consumer spending,0
he observed that an  increase in real wages tended to be associated with a decline in unemployment,0
  president plosser shares some thoughts about the stance of monetary policy and the advantages of raising rates gradually and starting sooner rather than being forced to raise them abruptly later,4
also pentup demand for various goods that have simply worn out over time but not been replaced,1
clearly at this maturity the federal reserve has almost total control over the real rate of interest in the short run,4
the presence of deposit insurance eliminates credit risk from covered deposits and thereby allows the operation of depository institutions at interest costs below those paid by other uninsured intermediaries,2
some monetarists believe that the federal reserve has engaged in massive restraint because growth of mla has declined so sharplyrestraint that poses the threat of a prolonged and deep recession,4
a sudden investor retreat sparked by a collapse in expectations of intervention would just add to financial market volatility in an already volatile situation which is why the sense of urgency about protecting creditors and counterparties becomes overwhelming during a crisis,2
some have been concerned that the federal reserve and the treasury might be working at cross purposes today to the extent that reductions in the treasury debt supply have lead to declines in longerterm treasury rates at a time when monetary policy is aiming to slow the pace of economic activity to a more sustainable rate,3
they fled to the safest and most liquid assets and as a result interbank markets stopped functioning as an effective means to distribute liquidity increasing the importance of direct lending through the discount window,2
ultimately people of all statuses lived in the central port area because of the concentration of industry and the high cost  and limited means  of travel,0
then about the first week in september temporary suspension of the 7 per cent investment tax credit uas recommended and the measure was adopted in october,3
these resource utilization rates may improve with further expansion of business activity but it should be remembered that results must be measured against an evergrowing potential stock of labor and other resourcesdespite the ample availability of workers materials and unused industrial capacity the expansion in economic activity since the recovery commenced is not especially large for this stage of the cycle,1
indeed the deficit would be needed in order to keep the economy from sinking into recession,3
q  dr willes in the case of the domestic steel industry what do you see as the most favorable alternative longrun in regard to unemployment retention of a basic industry and a favorable impact on all related steel using industries,0
correction of our adverse balance of payments and preservation of the dollar as an important international currency must be done by ourselves not by others,3
but i do think that the question of whether to target the  inflation rate or the price level should be a subject for serious discussion  among central bankers,4
indeed being a governor in the postfinancialcrisis era has made me much more sensitive to the importance of making sure we conduct examination and supervision in a way that helps ensure we think through potential consequences such as unnecessarily hindering lending to creditworthy borrowers,4
but fears about job security are understandably significant when nearly two million of our workforce have been unemployed for more than a year,0
 finally there still exists a group that believe no tax increase is necessary anyhow arguing that the economy is not overheating and inflation is not taking place,3
but many banks appear to be ready and able to lend to creditworthy customers  thats what banking is all about,2
in an effort to reduce longterm treasury yields from already historically low levels the fomc intends to purchase 400 billion of longerterm treasury securities and to sell an equal amount of shorter term treasuries by the end of june 2012 this action will not increase the size of the feds balance sheet but it will lengthen the maturity of the feds holdings,3
there are jobs out there that cant be filled because people just dont have the right training,0
interest rates which presumably reflect differential imbalances in states current accounts and hence crossborder borrowing requirements have exhibited very little interstate dispersion in recent years,3
a physical asset whether an office building or an automotive assembly plant has the capability of producing goods even if the reputation of its managers falls under a cloud,1
this office was charged with the responsibility of assuring that the interests of savers and consumers are given adequate and specific attention in board decisions,0
for instance a country might borrow abroad in order to finance what appears to be a temporary balanceofpayments deficit,3
moreover there has been an increased international tendency for financial systems to be more transparent open and supportive of strong investor protection8   accordingly the trend of declining home bias and expanding international financial intermediation will likely continue as globalization proceeds,2
measures to stimulate domestic saving that are justified on their own merits will effectively reduce our current account deficit and our reliance on foreign savings,3
enhancing the skills and thus the productivity of individuals in our society also makes us better able to meet the demands of a more globalized economy,0
from a policy perspective education is the heart that pumps the blood into every other organ in the economy,0
at the same time the longerrun health of the economy requires that the federal reserve be vigilant in preserving its hardwon credibility for maintaining price stability,4
as i will describe in a few moments the federal reserve has taken some steps toward this end over the past few years,4
the role that derivatives can play in allowing counterparties to manage risks  is now widely accepted,2
2 ultimately each banks board of directors and senior management are responsible for assuring their institution is ready,2
in addition estimates of sustainable rates of growth and unemployment have been shown to be highly uncertain at any point in time and they may vary significantly over time in light of new information and changes in the structure of the economy,0
then theres our technology                            servicessuch as those in oil field and                            drilling technology,1
as a central banker i can not resist the temptation to focus largely on international regulatory issues because more so than many other factors regulation influences the shape of international banking and will do so in the years ahead,4
financial globalization and financial innovation are closely tied with each trend promoting the other,2
we continue to examine banks to measure and ensure their compliance with the equal credit opportunity act,2
while affordable housing and quality jobs are two very visible needs for lowincome households meeting these needs requires strategies that stretch across the fabric of the whole community including childcare education and training transportation and a safe and healthy environment,0
the labor market is reasonably tight with the unemployment rate at 45 percent,0
1 4 these changes involve shifts in the structure of production as bullish expec tations are capitalized into heavy expenditures for investment,1
because of financial deregulation banks risktaking behavior also increased as they channeled more funds to realestaterelated sectors and to small firms accepting property as collateral22 trusting in a rising real estate market some banks went as far as lending more than 100 percent of a propertys appraisal value,2
these actions were designed to enable institutions to better compete with the marketplace for funds within the limits of their earning capacity and to the3 for a growing share of credit restraint to be achieved via price deterrents higher interest rates with a decreasing share being effectuated by nonprice restraints on credit availability eg rationing loan ceilings and the like,2
if productiv ity growth had shifted higher the economys sustainable growth rate would be higher as well and the inflationar y risks of faster economic growth would be diminished,1
psychological shifts influence financial markets much more rapidly than they change those for goods and services,2
consumers have buoyed the economy throughout the recent recession and they will continue to provide solid support for recovery,0
indeed the fed was established to provide an elastic currency that supports credit intermediation,4
some analysts now see supply constraints developing at 65 percent unemployment,0
last year the dallas fed distributed and  received almost 6 billion circulating banknotes worth nearly 103 billion at  face value,4
minimum capital requirements are a major tool for ensuring an adequate cushion,2
that is we  believe the level of federal spending should be held constant during the threeyear transition to lower rates,3
the taylor rule is a stylized view of the feds reaction to incoming information,4
although the ratios of nonperforming assets remain high in many cases asset quality appears to be stabilizing and bank provisions for loan losses are decreasing,2
by reducing the deficit i am convinced we will increase the capacity of the economy to grow in the long run,3
while the problem touches every community it doesnt look the same in each because its shaped by the circumstances that prevailed in those neighborhoods before the crisis hit,0
basel ii is rooted in modern finance and seeks to develop in the larger banking organizations a comprehensive systematic approach to assessing the various risks to which they are exposed,2
a more important observation is that generally the growth rates of connunity banks do not appear to be affected by the entry of larger competitors into their submarkets whether through acquisition or on a de novo basis77 roa of 118,2
today i want to look at the other side of the coin the implications for monetary policy of the swift evolution or revolution that is transfiguring the financial system of this nation,2
moreover real earnings of the average worker have continued to rise,0
another feature of the new industry is the type of contract procedure that has developed under the influence of the industrys single major customer,1
in addition the federal reserve took a variety of other actions including waiving daylight overdraft fees extending the operating hours for fedwire and easing the limits on securities lending to reduce the pressure on firms requiring securities that were made scarce because of settlement difficulties,2
perpetuating obesity with each passing year the banking industry has become more  concentrated,2
computerization  and  other  technological  how many programmers and computer technicians will  what percentage of our working population has the potential to acquire the  needed skills,0
the credit crunch of the early 1990s and the bursting of the stock market bubble in 2000 were absorbed with the shallowest recessions in the postworld war ii period,2
8 financial institutions also had an incentive to engage in regulatory arbitrage moving assets to undercapitalized offbalancesheet vehicles,2
the box employment disparities between rural and urban areas in the boards february 2019 monetary policy report examines these disparities in more detail see board of governors 2019 pp,0
other policymakers must bear their burden and do their part to encourage morerobust economic growth and establish the conditions for stronger employment,0
some of it is what you hear frequently u3 unemployment,0
i believe this remaining slack may at least partially explain why growth in average hourly earnings has been hovering around a subdued 2 percent trend,0
achieving fiscal sustainability        the primary longterm goal for federal budget policy must be achieving fiscal sustainability,3
lacker 2005having said that policymakers should be alert for opportunities to reduce adverse outcomes without harming credit availability  in other words to improve the terms of the tradeoff between credit availability and borrower protection,2
monetary policy and shifts in longrun productivity growth unpublished paper board of governors of federal reserve system division of monetary affairs may,4
as a result of the great recession the federal reserve has confronted two key challenges over the past several years one the fomc had to provide additional policy accommodation after shortterm interest rates reached their effective lower bound and two subsequently as we made progress toward the achievement of our mandate we had to start scaling back that accommodation in the presence of a vastly expanded federal reserve balance sheet,4
this means that central banks need to be prepared to employ all available tools including unconventional policies to support economic growth and to reach their inflation targets,4
trade on this level is unlikely to disappear  on the contrary its likely to increase  and that means even modest tariffs if they are applied several times over to the same production chain would be enough to disrupt a host of industries,1
at the same time imports will continue to grow faster than exports as the increase in us spending still outstrips that of many of our trading partners,3
funds for  5housing from the treasurywhether direct or from the trust fundsmust either be saved by lower expenditures elsewhere or they will add to inflationary pressures and not to outputon another tack ipersonally find the idea that insurance trust pension and similar funds and institutions be forced to put a certain percentage of their money in mortgages quite objectionable,3
in a recession period heavy federal borrowing demands may not be overly burdensome,3
however we suggest that it would be advisable for government authorities to continue to monitor competition in the payment system,3
the current account deficit is in large part cyclical,3
others have continued to live on their farms but have sought fnll or parttime offfarm employment while still others are continuing the struggle on submarginal units,0
household financial conditions are also consistent with the national figures with second quarter personal income expanding 22 percent against a 27 percent annual rate of growth nationally,0
child labor laws for example limit the size of the labor force,0
on other time deposits 73 per cent of the member banks pay a maximum rate of either 312 per cent or 4 per cent,2
strengths and weaknesses reduced inflation represents our  strongest  indeed it is a remarkable achievement in  light  recent    vement,4
however longtern interest rates including nortgage rates can cnly settle so far unless federal governrent spending and budget deficits can be brousht tmder control,3
as a result some financial institutions have turned down deals with unfavorable risk characteristicsdeals that they might have accepted in the past,2
the fomc has stressed that it will use the feds balance sheet broadly defined to ensure that monetary policy provides ample liquidity to the economy and to ensure deflation does not become a problem,4
the inflation premium of 5 percent is just  sufficient to compensate for the expected loss of purchasing power because of inflation,0
second comes the special income tax treatment of thrift institutions primarily related to their special function as mortgage lenders,3
in another manifestation of this situation factory overtime is running at the highest rate of the last 10 years,0
ifthe fed tried to set them higher or lower than required for market balanceforces of contraction or expansion would be set in motion,4
both of these developments will have a positive impact on business investment,1
its  likely that the latest numbers do not reveal the full extent of the financial devastation  faced by millions of american families,0
as a result personal savings rose above 70 per cent of disposable income a full percentage point above the average savings ratio in the 195366 period,0
indeed the treasury will need to raise 36 billion of new money  in the present quarter alone  onethird more than in the yearago period,3
in practice when the fed wishes to drain reserves it usually lets some securities mature without replacing them,4
and so fifth to what extent does a comprehensive regulatory approach to shadow banking need to include mechanismsinvolving the government directly or indirectlyfor the creation of more genuinely safe assets as well as limitations on the runnable varieties that can precipitate or exacerbate financial stress,2
such vehicles can serve as useful tools for structuring their legitimate business transactions,1
i will begin my remarks today by discussing historical experience with conglomeration in the us and the underlying conditions necessary for conglomeration to be a successful business strategy,1
it may be correctly anticipating a much higher level of profits than that reported in the latest official figures there are good reasons to think that profits are rising rapidly the volume of business operations is expanding and productivity has been rising unusually fast,1
while we are going to have to pay careful attention to the attendant financial stability issues and be prepared to intervene with supervisory and regulatory tools as needed i would find it hard to accept the proposition that we should preemptively resolve them by say starting to raise the federal funds rate today,4
over the past year job growth has averaged around 180000 per month,0
in addition to lowering the cost of our financial services we are also striving to improve the way that we conduct the bank supervision side of our organization,2
for the past several years wage increases have exceeded the very sluggish rise of productivity by 8 to 9 percentage points a year,0
in my opinion however a recession is not inevi table and our chances of avoiding one will be greatly enhanced if we pursue restrictive anticyclical policies today to bring the boom under control,3
similarly the involvement of political officials through the g20 was imperative to galvanize the legislative and regulatory processes of participating countries to undertake the breadth of needed reforms,3
there_ is no reason i know of why we should not continue to pursue these objectives and why we should not continue to have a forceful and determined commitment to the restraint and austerity in monetary policy that will assure that we wring out these forces of inflation and not allow them to reassert themselves,4
most of the increase in labor force participation after 1960 can be attributed to the growing presence of women in the labor market,0
not surprisingly declines in home prices generally have not led to financial instability,2
these changes however show how seriously the basel committee and its participating national authorities regard the public comment process and benefit from the analysis of bankers and other interested parties,2
as you know the second half of the 1990s saw a recordbreaking runup in equity values in the united states,2
this new landscape demands we think differently about how to balance and achieve our price stability and full employment objectives,0
last year was in some respects a difficult one for the american people and the economy,0
to minimize market uncertainty and achieve the maximum effect of its policies the federal reserve is committed to providing the public as much information as possible about the uses of its balance sheet plans regarding future uses of its balance sheet and the criteria on which the relevant decisions are based4 exit strategy some observers have expressed the concern that by expanding its balance sheet the federal reserve is effectively printing money an action that will ultimately be inflationary,2
scenario analysis should ultimately facilitate estimating the possible effects on individual financial institutions as well as on financial markets more broadly,2
third the rapid expansion of large us banks abroad and increased reliance on foreign sources of funds and earnings clearly illustrates that important components of the us financial system are becoming more intertwined with that of the rest of the world,2
in the first quarter of 1995 housing wealth was equal to roughly 14 times aftertax income and by the third quarter of 2001 that ratio increased to about 16 without ever moving outside that fairly narrow range,0
moreover it improved the efficiency of money and capital markets affording savers and investors greater opportunities to lend and borrow at or near market interest rates,2
as i noted earlier the strong economy may continue to pull some primeage individuals back into the labor force and encourage others not to drop out,0
these include the recent decline in mortgage rates slower house price appreciation which was running 6 to 7 percent in early 2018 and is now in the 3 to 4 percent range and an increase in household formation driven by the strong labor market which allows more people to commit to purchasing a home,0
then ill discuss some of the effects that changes in the financial environment may have had on the behavior of mortgage markets participants,2
ninety us banks were in the top 500 but they accounted for only 11 percent of total deposits,2
the weakening in earnings of thrift institutions that began after 1978 deteriorated further to widespread losses in 1981 and funds for new mortgages became scarcer and more costly,2
in international bank supervision the important question to answer is what is the capacity of the home bank to support operations abroad,2
i f nonbank banks are allowed to operate these institutions will bring our financial system about as close to full interstate deposittaking by insured banks as we can get without actually being there,2
moreover we soon will implement a new temporary commercial paper funding facility that will provide a backstop to commercial paper markets by purchasing highly rated commercial paper directly from issuers at a term of three months when those markets are illiquid,2
elevated bankruptcy rates are troubling because they highlight the difficulties some households experience during economic slowdowns,0
job levels are still not back to their prerecession highs and the states unemployment rate has been higher than the nations,0
the dramatic recent expansion in government lending has extended safety net support beyond the set of institutions previously covered by that regime,2
i will conclude my remarks on cooperative efforts by focusing on reduction of credit and liquidity risks in the foreign exchange markets,2
it is recognized that extended unemployment means that the economy will be producing below its potential and that consequently longrun growth will be reduced,0
reorienting budget strategy to promote longerterm economic growth appears to be a most sensible goal of fiscal policy,3
since then the  treasury has been forced to do all its financing with securities     5 bearing five years maturity or less,3
the immediate goal of such facilities however is the reduction of stresses in the interbank funding market,2
in addition against the backdrop of very high private saving rates they may be concerned about their ability to generate sufficient domestic demand to provide employment opportunities in some cases for the growing numbers of people who want to shift from agriculture to higher productivity jobs often in urban areas,0
we committed to work together to stabilize financial markets and restore the flow of credit to support global economic growth,2
if private markets are going to perform their risk control functions then market prices must send the right signals to all participants about the risks and rewards of a particular transaction or at a given firm,2
these spending habits together with the severity of the 198182 recession worked to dramatically enlarge the budget deficit and saddle the economy with huge public sector borrowing needs,3
for instance total bank credit in the united states over the same 312 years grew at an average annual rate of 109 percent,2
still others argue that while it is possible the creation of such insulation removes the benefits and synergies of affiliation ot depository institutions with nonbank firms,2
the american bankers association series on delinquencies has remained at a low level repossessions and losses have not presented a problem so far,2
the reduction of market discipline has  been further eroded by implicit extensions of the federal safety net beyond  commercial banks to their nonbank affiliates,2
as we work to increase familiarity with new technological and financial tools we give people the resources necessary to secure individual economic success,0
in reaction to worse economic prospects and tightening credit conditions households have continued to retrench putting consumer spending on a pace to post another sharp decline in the fourth quarter,0
these data add to the evidence that credit availability to small businesses is gradually improving,1
a study done earlier this year at the atlanta fed shows bank profitability declined further in 1986 particularly among the smallest institutions,2
all things considered the simple annual interest requirement would increase the expense of extending credit both to the lender and to the customer and would only serve to confuse the public,3
the federal reserve has conducted substantial research about the potential effects of basel iipublished on our web siteand plans to continue those efforts,2
under these assumptions the upward pressure on interest rates on government bonds could be expected to be greater than otherwise,3
for example some firms face high rates of absenteeism as workers get sick are exposed to the virus and need to quarantine or are reluctant to come to work because of health concerns,0
for example inflation peaked in 1982 long after monetary policy saw it coming and moved strongly to counter it and long after the early 1980s recession began,4
todays workers are essentially paying for todays retirees,0
enlarge by helping my staff and me better identify the underlying inflation signal the dashboard in turn helps us determine whether monetary policy is properly calibrated to economic fundamentals,4
the large figure for the savings bonds holders show us dramatically that the savings bonds program as a feature of federal financing cannot be ignored,3
would a statement that all major financial firms even the most diversified ones are subject to coordinated supervision suggest a degree of support that effectively extends to an unwarranted extent the subsidy associated with national safety nets,2
michael moskow speeches  2006  345  finally another factor that will affect our future economic growth is our ability to improve the quality of our workforce,0
not surprisingly turnover is high in these parttime jobs,0
the jobspecific requirements in most industries and vocations will evolve rapidly and become more digitally demanding if you will in the second machine age,0
third even under the best of circumstances reliance on monetary policy alone to bring inflation down will yield extremely disappointing results,4
the relaxation of regulations itself contributed to the innovational processso too did the application in financial markets of technological2thirty years ago commercial banks hung out a shingle that said we accept deposits and took whatever deposit flows resulted,2
however primeage worker participation is only 76 percent for those with a high school diploma and only 66 percent for those who have less than a high school diploma,0
before  every meeting of the federal open market committee fomcthe forum in which we  make monetary policy decisions at the fedi survey some 25 to 30 business  leaders large and small from a group of 50 or so that i have developed over  the years to provide me a sense of what is being seen from the economys operational  side in most every sector,4
but many of my fomc colleagues have stated preferences for inflation a bit higher  between 1¾ percent and 2 percent,4
conclusion  in conclusion i think the year ahead will be one in which growth will continue but at a slower more sustainable pace than in the year just ended and in which unemployment will remain low nationally,0
that is why this type of financing often is cheaper than borrowing from an institutional lender,2
primary obstacle to achieving full employment,0
that is because it expands the capacity of the economy a matter which is quite vital at a time when we have been very near our capacity limitswhether measured in terms of the unemployment rate or factory use,0
the president2s working group itself was a product of the 1987 stock market crash which revealed a need for better communication and coordination among all financial regulators,2
economists have downgraded the ancient antiinflationary safeguards such as a balanced budget,3
ut_ths says that to keep those troops there we have to get 3 or billion dollars of yen or francs or marks or pounds sterling r so n to pay for whatthese troops spend in those countries,3
japanese export growth has slowed considerably in recent months and some categories have actu ally registered declines,1
an additional 8 million workers were classified as part time for economic reasons because their hours had been cut back or they were unable to find a fulltime job,0
the 10 largest banking organizations operating in new jersey hold over 80 percent of new jersey banking assets about twice that of the nation,2
as a matter of fact it is harder for the college graduate to get started on his own than it is for his high school classmate who has been working for four years accumulating something in the way of tangible assets while the college boy has been investing his time and money in a potentially more valuable but nevertheless intangible asset in the form of technical knowhow,0
i will begin by reviewing briefly the benefits and risks associated with international banking and then identifying the different models for allocating responsibility for the oversight of international banks,2
most farmers are probably net monetary debtors and thereby receive windfall gains from inflation,0
in a number of cases countries have had to seek  14rescheduling of their debts to avoid imminent default and it would not be hard to list some current problem cases,3
regulatory reform mostly passed over these transactions i suspect because sfts appear safe from a microprudential perspective,3
i have noted my consciousness of possible inflationary pressures in 1973 but i think the facts that we are utilizing our manufacturing capacity at a rate of less than 80 per cent currently in this country and that we have a 59 per cent rate of unemployment do not suggest a need for choking off the stimulus to investment and expansion,0
the creation of large international networks by these banks has clearly resulted in a capacity for financial operations that has proven essential for the financig of payments imbalances in the last few years as well as for the further expansion of world trade and investment,2
the spillover effects from the asian turmoil should further slow growth over 1998  the degree of slowing in growth and the size of the depreciation in the exchange rates in the region still will be affected by policy actions to be taken by those authorities and the uncertain timing of any improvement in investor confidence,2
the result is that through inflation a strong bias is created in favor of public and against private provision for the future,3
credit demands from japan and italy diminished as economic activity and credit conditions eased in these countries,2
the recent progress on the fiscal side is encouraging but much more needs to be done,3
when all is said and done we are left with the reality that there is no reliable tradeoff between unemployment and inflation,0
specifically i want to reflect on the changing role of economic policy in our current environment of rapidly improving communications and expanding markets,3
for back in early 1969  it was widely held that a modest decrease in aggregate demand or a moderate increase in the unemployment rate would rather quickly lead to a pronounced slowing of inflation,0
indeed your comments on our proposal   to revise the basel accord suggest that you are comfortable to say the   least with not having to invest in the institutional infrastructure to   be required of the largest banks,2
we are also working on an international basis to advance sound principles for compliance risk management,2
the house is now considering another piece of legislation covering the activities of foreign institutions in this country somewhat along the lines of proposals made by the federal reserve a year ago,3
in fact as in the united kingdom the principlesbased riskfocused approach to regulation has had considerable influence on this side of the atlantic as well,3
by the same token would it be wrong in some moral or economic sense for a large bank or bank holding company to also own a life insurance company an investment banking company a computer company and a real estate development company as long as the insured deposittaking company was insulated from whatever additional risks might exist in those other businesses,2
to mitigate that risk clearing arrangements for forward transactions typically impose variation margin requirements on their clearing members,2
hold back   as the united  if vebgp tfothat if we  get our balance of payments under control  get  f imnfmni  qmjc  then the two price system will go by the board aeuat  ama awfnl y ctrgeto a  tka a frw wetegq1yoirttt,3
some may see a monetary policy that actively addresses episodes of financial instability along the lines that i have just described as promoting excessive risktaking and thus increasing the probability of future crises,2
a subset of governmental objectives an important one is the responsibility of the banking and thrift agencies particularly the federal reserve for the integrity of the whole of banking or of payments system institutions,2
increasing the effectiveness of supervision must be a top priority for our institution,2
capital after all is the best protection for depositors and other creditors against loss third statutory authority for supervisors to intervene in a troubled bank before it becomes brain dead or capital insolvent,2
shortrun stabilization of output and employment is   more effective when inflation expectations are well anchored because the   central bank need not worry that for example a policy easing will lead   counterproductively to rising inflation and inflation expectations rather   than to stronger real activity,0
neighborworks america the leading provider of community development training in the country has provided management and leadership training for community development professionals for more than 25 years,0
near the cycle peak however the pace of spending subsides and the saving rate should rise as people set aside a higher proportion of their income gains as a hedge against leaner times in the future,0
in short depository institutions will have additional incentives to assume more of the backbone payments processing and will be better able to do so as a7 reducing the implicit subsidy offered through free federal reserve intraday credit,2
thus vendor credit bank and nonbank credit cards instalment contracts float bank overdraft arrangements make it convenient for businesses and individuals to time the payment of bills out of a flow of credits and reduce the size of their average money holdings,2
if we have a recessiori we will go into deficit if we have a boom we should have a surplus in order to bring us back to normal and that is the philosophy we must return to afte20 years of believing that it should just be deficits,3
that is the bad news because job destruction creates political  pressures for transition programs at best and protectionist or retaliatory  responses at worst,0
that reality tells me that it will be some time before we tighten our interest rate stance or pull back strongly from our actions supporting financial functioning,2
for instance an increase in household demand for durable goods may be offset by a decline in business acquisitions of plant and equipment or housing construction,0
critically the financial regulatory structure needs to be modernized to bring oversight and market discipline to bear much more effectively on our rapidly evolving financial system and to give regulators more tools to deal with problems as they arise,2
but th e y are w o r s e off b e c a u s e they  a c c e p t t h e jo b s at a l o w e r w a g e t ha n the y o t h e r w i s e would,0
borrowers in trouble who receive foreclosure counseling are relatively more likely to subsequently become current on their mortgage receive a loan modification and ultimately keep their home,0
uniform deposit insurance premiums and until riskbased capitaì standards are implemented in 1992 uniform capital requirements allow management to avoid some of the real risks of their asset decisions and i iabi i i ty management practi ces,2
the definition of property tax base ranges from assessed valuation of all real and personal property which is the most common in the united states to net worth or some fraction of tangible assets,3
first lets take a look at some individual bank problems,2
british households equity wealth increased more than g880 billion thousand million between 1995 and 2000a gain in excess of 50 percentwhile their housing wealth rose by more than g650 billion,0
while this dramatic improvement in bank performance has been occurring the banking industry has been undergoing a tremendous transformation,2
his attacks on the banks power struck a popular chord with farmers small businesses small banks and many politicians all of them perceived the bank to be a giant obstacle in their path to success,2
in rural counties of the west customers had access to an average of 46 banks in 2017 compared to 54 banks in the east,0
fears of credit shortages develop  ing for housing therefore seem exaggerated,0
but the notion that constitutional restraints are thejl this possibility is in addition to the increase in the tax base in income tax states which permit federal taxes as a deduction in computing taxable income22in spite of the higher yields at existing tax rates that will be forthcoming from a growing economy many states and localities will need still more revenue,3
naturally the  nature of the banks response to the needs of the day must change as the nature of the problems change,2
in this special situation where financial intermediation no longer adequately functioned to foster monetary expansion through the private sector fiscal policy could in effect be used as a vehicle to enhance the effectiveness of monetary policy and in this way help to bolster aggregate demand,3
in todays world of credit risk models especially for centralized underwriting in areas such as consumer mortgage and small business credit the responsibilities of data input may reside with the lending officer,2
while banks sometimes feel disadvantaged compared to their nonbank competitors i would point out that neither banks nor their new competitors can engage in all aspects of the banking business on a nationwide basis,2
a central banks claim on a failing banks collateral simply reduces the liquidation value of the institution and thereby increases the cost to the deposit insurance fund,2
this banking structure is very different from that of other industrialized nationsfor example there are less than 500 banks incorporated in england germany and canada combined,2
significantly however the average factory worker now gets 9 paid holidays each year and many workers get more,0
indeed us financial markets have proved to be notably robust during some significant recent shocks such as the sharp decline in equity prices beginning in 2000 and the failure of some large firms including enron and amaranth,2
the ability to hold lenders accountable for poorly underwritten loans is a significant protection for taxpayers,3
under these circumstances fear and hence disengagement on the part of investors holding net long positions often lead to simultaneous declines in the values of private obligations as investors no longer materially differentiate among degrees of risk and liquidity and to increases in the values of riskless government securities,2
indeed a dramatic development of the crisis was the series of runs on nondepository financial institutions,2
at the same time consumer spending and housing held up quite well,0
7  bradford grieco and hufbauer 2006 conservatively estimate that global free trade would produce higher per capita income ranging from 1540 to 2069 using 2003 dollars or from 1635 to 2255 using 2006 dollars,0
although the events of 2008 were not centered in equityrelated markets the measures taken after 1987 no doubt contributed to the resilience of clearing arrangements in the securities and derivatives markets,2
another trouble spot is consumer spending especially in view of the recent sharp worsen ing of consumer sentiment because of fears about inflation and shortages,0
the substantial expansion o f the federal budget d eficit has contributed to tis situation,3
in that tugofwar savings banks seem poised in the middle more specialized than the generalpurpose lenders yet distinctly broader in their outreach than the traditional personal thrift and home financing institutionsis that position a viable one in the long run or are mutual savings banks themselves in the process of evolving toward one extreme or the other,2
it also stands to reason that the hometown banker does not always look with favor upon his own page 8  best customer esablishing a liaison with the edge act of a large money center bank,2
there is growing evidence that this commitment to maintaining low and steady inflation has been a major contributor to individuals and businesses confidence and willingness to spend and invest,0
for such programs to be effective in complex financial institutions compliance must be addressed on an enterprisewide basis,2
in 1987 japan had an external surplus of nearly 90 billion or 312 percent of its gnp,3
in the fourth quarter of 1980 the ach credits generated by the federal government were equal to 30 percent of its check volume,3
there are certainly enough meetings of group of seven g7 group of twenty and bank for international settlements bis central bank governorsâvirtual and in personâthat provide such opportunities,3
of course standard economic principles would suggest that firms should offer higher wages to attract desired workers,0
the toobigtofail problem is a pernicious one that has a number of substantial harmful effects,2
16in summary the monetary approach to economic stabilization i have just presented incorporates the following points 1 public stabilization policies should focus on total spending allowing markets to filter their influence throughout the economy,3
however this  would permit them to compete more readily for domestic deposits,2
the second alternative and independent test leaves open the possibility that institutions not engaged very substantially in  15home mortgage lending would retain liberal rreatment with respecc to activ1ties and bankl1g,2
it allows the fed to make wellinformed credit  decisions and thus determine whether a problem is merely a temporary liquidity shortage or a more severe situation that threatens a banks solvency,2
individual  t h e s e t h e o r i e s t e l l us  6  e m p l o y e r s w il l base t h e i r o f f e r i n g wa g e on t h e i r p e r c e p t i o n of m a r k e t w a g e s  a n d g i v e n t his o f f e r i n g wa g e the y wi l l s e a r c h until the y can hire s o m e o n e q u a l i f i e d at t h a t w a g e or u n t i l the y d e  t e r m i n e t h e y m us t c h a n g e t h e o f f e r i n g wage,0
stable economic growth with full employment is essentially a process of maintaining an appropriate balance between growth in productive capacity and increase in consumption,0
in the late thirties banks made interest payments of about 225 million at an average rate of 15 per centthe overall statistics i have been reciting are reassuring for they suggest banking has regained a position of size and influence in the national economic community,2
every democratic society struggles in the purgatory between the ideal of government responsive to citizen concerns and the practice of a messy process responsive to wellfinanced advocates,3
their analysis shows that statelocal activities however measured have grown more rapidly than the economy and faster even than federal programs,3
or perhaps better we need at this juncture a separate and simple piece of national legislation,3
lets assume that the economy is initially at full employment and price stability,0
furthermore it was in 1966 that the acceleration of military activity in vietnam began to have a substantial impact on the domestic economy,3
tight labor markets are putting pressures on wages but competitive markets are limiting pricing leverage and causing profits to be squeezed,0
the optimum banking system of the future would provide the best possible banking and other closely related financial services at the lowest possible cost and without undue risk to the payments system,2
inflation expectations and institutional    7    barriers  such as local building codes and landuse regulations  also work 70 price firsttime homesuyers out of the market  still the mortgagefi nance problem is critical  pr o b l e m s o f mo r t g a g e f i n a n c i n g t h e h o u s i n g i n d u s t r y  a n d t h e f o r e s t p r o d u c t s i n d u s t r y  c l e a r l y c a n n o t r e c o v e r w i t h o u t a n i m p r o v e m e n t in t h e f o r t u n e s of the mortgagefi nance industry  over the years that  industry built up large portfolios of longterm fixedrate mortgages but financed those investments with shortterm deposits such as passbook accounts and savings certificates t o d a y  t h r i f t i n s t i t u t i o n s a r e p a y i n g r o u g h l y 13 p e r c e n t o n sixmonth moneymarket certificates although 60 percent of the mortgages on their books carry yields of less than 10 percent,2
the ultimate goal should be to insure that competition takes place on the basis of price and quality of services rather than by exploiting regulatory advantages or disadvantages,2
indeed regulators might vary liquidity requirements in a countercyclical way with greater liquidity required during the development of creditfueled asset bubbles in order to regulate the amount of allowable maturity transformation,2
for example to realize the benefits of its ict investments walmart had to reorganize work assignments retrain workers develop new relationships with suppliers and modify its management systems,0
and we speculate about the implications of monetary union and the eurofor the euro area for the united states for the world economy and especially for the international monetary system,3
to guide the banks supervisors provided indicative lossrate ranges for the system as a whole derived from both analysis of historical loss experience at large banks and quantitative models relating loan performance to macroeconomic variables,2
of the total number of new graduates only about 512 per cent specialized in engineeringa decline from the 812 per cent of 10 years ago,0
over 92 per cent of all member banks in the san francisco district  reported having increased their rate on savings,2
some tax increases were initiated,3
but when the tech bubble burst we did not feel the pain that those regions felt either,2
personal income after taxes in the u s is more than 430 billion or about 2250 per capita,0
jobs might be increasing in north dakota the state with the lowest unemployment rate but unemployed workers from nevada the state with the highest unemployment rate are unwilling or unable to relocate,0
but it does not differentiate in a more granular way among entities that may behave very differently under stress such as traditional banks and money market mutual funds16           to complement the lcr and nsfr in 2012 the federal reserve launched the comprehensive liquidity assessment and review clar for firms in the large institution supervision coordinating committee liscc portfolio17 like the comprehensive capital analysis and review ccar clar is an annual horizontal assessment with quantitative and qualitative elements overseen by a multidisciplinary committee of liquidity experts from across the federal reserve,2
there are many ways that interstate banking legislation could incorporate concentration limitations,2
in that year we had 1 million joo thousand housing starts and sold about 712 million new automobiles,0
with so much energy  being expended on the what the when and the how of implementing doddfrank the first risk we run is  forgetting the whythe reasons for  the act its primary goals,2
higher capital requirements increase bank costs and at least some of those costs will be passed along to bank customers and shareholders,2
the study suggests that nafta will generate more real economic output and a higher level of tradetwice as much as suggested by other studies that use a static model,3
there are  when you add to the economic  concerns i have already mentioned other problems such as the middle east central america arms control terrorismand the list goes on and onit is obvious we live in a dangerous and difficu lt world,3
but if you  consider the number of unsold homes on the market today and that the price of a house has gotten out of reach for many people i am not confident of a boom in this sector in the foreseeable future,0
let  me close this discussion of fiscal uncertainty with one more thought,3
effectively managing market liquidity risk can limit the effects on          asset price volatility,2
but the recovery in equity prices and the stabilization in home values no doubt have contributed to the modest recent upturn in consumer spending,0
in theory this could provide a backstop against unusual spikes in the federal funds and other money market rates,2
whatever operating model they chose financial institutions clearly are reassessing the range of scenarios they need to address in their businesscontinuity planning,2
through its community economic development company funded through public and private partnerships marshall heights renovated a shopping center  a step that has brought nearly 400 muchneeded jobs shopping facilities and services to the neighborhood,0
ireland and spain also aimed to restructure nonperforming loans,3
20220 telephone 5662041 for release kr 8pm edt may 14 1980 remarks by the honorable g william miller secretary of the treasury before the chicago council on foreign relations chicago illinois hay 14 1980 the international financial institutions a critical role for the l980s i welcome this opportunity to discuss key us interests in the international financial institutions and the role of those institutions in assuring world economic stability and progress in the 1980s,2
i believe that every community has an equal right to market rates on loans and on savings,0
forrestal president federal reserve bank o f atlanta to the shearson lehman brothers inc interstate banking seminar n ew york n ew york may 17 1985  its a real pleasure for me to be here with you institutional investors this morning to lead o f f this seminar on interstate banking,2
what is the effect of growth and decline  in national income on district income,0
this movement has rallied under the banner of government in the sunshine,3
investors have strong financial incentives to analyze information about inflation and the macroeconomy to better predict the path of monetary policy,2
one can certainly look at things like banks capital ratios but some of the important action from a financial stability perspective is likely to be in subtler forms of leverage that are either outside of the traditional banking sector or more prone to shape shifting,2
it was also designed to help americas financial system meet the needs of a growing economythe same purpose behind the founding of the federal reserve more than 100 years later,2
the subject has come in for considerable attention recently as the  president has asked the congress to remove the present 4 14 per cent ceiling on treasury bond rates and the 326 per cent ceiling on savings bond rates,3
public confidence in the banking system an essential element to the stability of that system can only be maintained through a system of governmental oversight and the use of such tools as federal deposit insurance the discount window and necessary powers to rescue or assist troubled institutionsthe market alone cannot be relied upon to assure banking stability and the stability of the economy as a whole,2
it is difficult  the treasury has run deficits in 14 of the  past 15 years and as matters presently stand will post another substantial deficit in fiscal 1975  these deficits have occurred with almost  uninterrupted regularity practically without regard to the stages of the business cycle,3
the employment report for february showed another small uptick of labor force participation following earlier similar moves beginning last fall,0
by taxing the world without consuming or investing at home the full revenue opec is putting investable resources at the disposal of the rest of the world,3
as i have said the committee has greater tolerance for interest rate fluctuations today than it used to have,2
bankers should then analyze the business impact of these possible disruptions which could include a prolonged recovery period and fashion appropriate responses,2
third some reserves can be soaked up by the treasurys supplementary financing program,3
the devaluation of the dollar with respect to other currencies which could have been achieved without any reference to gold will be instrumental in improving our international sales and balance of payments position,3
we learned this lesson most dramatically during the 1970s when despite the extensive efforts to reduce unemployment the fed essentially failed and the nation experienced a prolonged period of high unemployment and high inflation,0
by providing somewhat more stimulus the fomc could have stimulated at least somewhat more employment growth without creating undue inflation,0
but high school completion rates have stalled and there is a great deal of dissatisfaction with the results in our public elementary and secondary schools especially given our already enormous investment in education,0
qualified individuals may receive 52 additional weeks of unemployment insurance if they are enrolled in an approved training program,0
success will require both financial discipline and fundamental economic change change toward more efficient marketoriented economies more room for private initiative  23and investment more competition and more openness,2
i would hope that the congress and the administration would act promptly so that fiscal and monetary policy will be working together to bring down nflation,3
to be sure rd spending remains concentrated in the mostdeveloped countries with the united states still the leader in overall rd spending10 however in recent years spending on rd has increased sharply in some emerging market economies most notably in china and india,3
the high employment budget moved sharply into deficit during 1966 and 1967 indicating a high and accelerating degree of fiscal stimulus,3
the government had already put fannie mae and freddie mac into conservatorship to preserve the mortgage market,3
this is perhaps better viewed as a way of broadening the scope of banking than as an authorization for equity investment since the range of permissible bankrelated activities is extremely limited and since a bank holding company usually though not always acquires 100 per cent of the new affiliates common stockto permit listing on a national exchange,2
in the eighteenth century the names on commercial paper were those of merchants aristocrats ship owners and such,2
i want to make the case that our best opportunity is to bring more women into the workforce  and retain them,0
therefore they do not operate with tax revenues but rather pay expenses out of earnings,3
this indicates to me that an exceptionally strong growth in demand for credit which accompanied the very strong economic expansion was the primary cause of the rise in interest rates and not federal reserve actions,2
today we borrow to finance a budget deficit ie in effect for consumption,3
distinguishing between these two types of changes may often prove a difficult task for both bankers and bank regulators,2
he may seek to enlarge hisholdings to a size that will permit optimum utilization of his labor and of modern methods and equipment,0
moreover foreign investors began to lend to mexico for the first time since 1982 thus mexico like chile was held out as a model of economic reform by most observers and officials from other countries consulted with government and central bank officials of mexico to replicate its successes in their own countries,3
we must continueor even bolsterefforts  flexibility our labor force,0
these popula tion figures testify to the considerable size o f the southeastern market,0
nevertheless given the existence of strong  social priorities this device seems to have enough merit to warrant further study and experimentation,0
futures and options contracts are veterans of generations of use in the commodities markets and short positions puts and calls have been factors in financial markets as well,2
protectionism will also slow the inevitable transition of the workforce to more productive endeavors,0
second there have certainly been periods in the past in which federal reserve policy mistakes caused increases in unemployment at least for a time,0
the community development corporation cdc of brownsville works with multiple funding partnersgovernments at all levels financial institutions foundations and corporationsto construct housing and to design innovative loan products that enable lowincome families to qualify for mortgage credit,0
but to the extent that we are still dealing with a labor force issue the problem lies on the supply side not with demand,0
in particular we must seriously grapple with the issue o f global competitiveness lest we sacrifice our own and our childrens future standard of living,3
this approach avoids the costs of direct regulation by relying on the selfinterest of hedgefund counterparties and investors to exert market discipline on these organizations,2
banks and other financial institutions typically delay for several days access to funds deposited by check,2
however the downward adjustment of stocks to more desired levels now seems well along in most industries and this drag on production may be diminishing,2
however financial instability can also be a consequence of governments and their policies even those intended to reduce instability,3
together these facts make a lot of todays unemployment look more cyclical than structural to me although persistent cyclical unemployment runs the risk of translating into structural unemployment through the loss of skills,0
according to the sp caseshiller home value data released earlier this week as of december 2007 average prices had declined by 15 percent or more over the past 12 months in phoenix san diego miami and las vegas,2
but in ordinary circumstances the aim was a straightforward one to achieve minimal interference with market allocations of fundsin a speech of september 1953 i found myself asserting that one of the great virtues of monetary policy as then applied was that changes in the structure of interest rates were determined by interplay of the demands ofa freely functioning market and a supply of bank reserves and money that was attuned to economic needs rather than the desire to hold down or push up particular interest ratesany other course risks a progressively increasing dependence of the market on official judgments as to appropriate levels of rates and allocations of funds with a corresponding stultification of independent private judgments that are the backbone of a we11functioning competitive market3 in that decade those goals of sustained economic activity and the prevention of dangerous inflation and deflation were the prime targets of our monetary policy,2
household balance sheets have strengthened considerably with wealth and income rising and the household debtservice burden at its lowest level in decades,0
but when there are significant differences it is not easy to work up much confidence 8second there is likely to be concern about the possibility of bias in particular models or specifications of loss functions andopalash point out that in a quadratic loss function if the target values for unemployment and inflation are set low such as at zero the unemployment variable will obtain an unintendedly high weight,0
while it is difficult to know precisely at least a third to half of homeowners took some cash out when they refinanced their mortgages last year,0
in addition investors appear to be willing to pay for the safety and liquidity of certain government securities,3
specifically consideration should be given to variable tariffs on im ported oil and to gradually relaxing ceilings on domestic oil and gas prices,3
conclusion while 2002 undoubtedly was a difficult year that focused a number of supervisory issues for the federal reserve and its fellow regulators our analysis to date suggests that these issues were neither caused nor exacerbated by the glba,2
without these freedoms our banks would not have achieved the leading position they now have in world banking,2
it has been argued 100st recently by the joint economic conmittee that this mix  8has been unbalanced with monetary policy carrying too much and fiscal policy too little of the burden of combating inflation,3
as in similar neighborhoods in the district of columbia and throughout the united states there is much to celebrate in the results of community investments,0
the high growth rate was supported partly by the normal longterm growth in productivity and the labor force but also by the gradual reemployment of the substantial amount of unused resources which existed at the end of the 1950s,0
the application of the golden rule would suggest that countries should not allow institutions to use their territory as a base for operations in other countries that are not permissible in their own country,3
2  and as a regulator were working closely with other regulators to review the preparedness of the financial institutions we supervise,2
until the early 1990s the analysis of credit risk was generally limited to reviews of individual loans and banks kept most loans on their books to maturity,2
productivity improvement has been at work in the financial sector too,2
and this role is a byproduct of having de facto monopolized interbank settlement,2
it has enabled families to build up some protection against the uncertainties of the future and it has often financed a better life tomorrowrarely however have savingsminded people faced as troublesome an economic outlook as we face todayour economy is being ravaged by inflation upsetting plans and clouding the future,0
much of that burden will fall on the generations behind them,0
i do not want to ignore the possibility that transitory favorable supply shocks can for a while offset the effect of a belownairu unemployment rate on inflation,0
taken far enough there would never be a pay down date for any of the budget scenarios in table 2  the costs of this plan would be essentially those that are always raised with social security privatization,3
today the funding of retraining displaced workers has moved closer to a voucher system giving the worker greater choice over his own retraining,0
in this final decade of the century it seems that the clearest trend around the world is to reduce the role o f the nationstate in economic affairs,3
in 2009 the us treasury will issue about 17 trillion of net us new debt,3
international standardsetting bodies serve an important role within our global financial sector and i look forward to the fsb advancing our progress and work in these areas,2
in my view preventing the failure of aig was the best of the very bad options available but it nevertheless involved major costs including financial risks to the taxpayer,3
consequently i am  afraid that many farm banks as well as other depositories w ill remain in a tenuous condition until we can make a convincing expression o f our determination to reduce the federal budget deficit,3
the regulatory agencies ability to redesign cra regulations over the years kept it relevant as the financial markets changed,3
moreover among consumers the burden would fall most heavily on those low income groups that can least afford to bear it,0
the labor force participation rate remains below most estimates of its underlying trend and an unusually large number of people are working part time but would prefer to work full time,0
financial institutions cannot expand their activities in these markets without having the capital to do so,2
on the other hand it is also of highly critical importance that fiscal restraint through an increase in income taxes and a reduction in federal spending in that order be made to bear a much larger share of the responsibility for the stabilization of the national economy,3
it appears that loan demands particularly business loan demands eased markedly at both the multinational and major regional banks during 1970 both groups recorded slight drops in their total loans adjusted for loan sales and comparatively sharp decreases in their business loans,2
the participation rate is the percentage of people 16 years of age and older who participate in the workforce by either working or looking for work,0
  us  banks  are  currently  9    underrepresented  among  the  worlds  top  banking  institutions in part because o f interstate banking restrictions and limitations on the types o f businesses in which they can engage,2
thousands of jobs were created by firms such as microsoft apple and dell computer that did not even exist in 1970 at the same time the application of the new technology in established industries greatly enhanced productivity and led to rising wages and increased demand for labor,0
the december guidance clarifies that the pandemic asset purchases will continue at least at the current pace until substantial further progress is made on our employment and inflation goals,4
such increases can be common in this stage of the business cyclebusinesses thus far have absorbed input price increases presumably believing that competitors would not follow suit which suggests that they believe that overall inflation will remain low,1
but by february 2020 the lengthy economic expansion increased educational attainment and a decline in fertility rates had brought the employmenttopopulation ratio for hispanic women in line with that of their nonhispanic peers,0
to be sure all depository institutions that decide to offer now accounts under the new authority would do so on the same terms so that the troublesome interestrate differential would be eliminated for that category of deposits,2
one area to watch in the near term is how employment evolves in states that are ending enhanced unemployment insurance early,0
for the most part the federal reserve generally recognized these changing fundamentals and calibrated american monetary policy accordingly,4
last month the federal reserve combined the duties of two of its internal committees that deal with payments issues,4
and second having the chance to spend a day in iowa is a great way for me to learn more about the regional economy specifically business conditions in this area,1
we expect only one or two dozen banks to move to the us version of basel ii in the near term meaning that the vast majority of us banks would be able to continue operating under basel i which will be amended through a separate rulemaking process,2
that said holding the fed more formally accountable for promoting financial stability makes sense only if the institutions powers are consistent with its responsibilities,4
as is evident from the last published policy record of the fomc for its november 16 1982 meeting released on december 27 1982 the fomc chose to give greater emphasis to m2 and m3interestrate targetsbut while the fed has not given up on money targets today the argument is increasingly heard that the federal reserve ought indeed to abandon them and instead target on interest rates,4
monetary policy what does this mean for monetary policy,4
therefore today i will also consider how these shifts may affect womens longterm financial prospects and will end with ideas about potential ways to make it easier for women to join or rejoin the workforce,0
with these considerations in mind i believe that appropriate policy calls for a slow pace of normalization in order to give the real economy an adequate growth buffer to withstand downside shocks that might otherwise drive us back down to the zlb,4
this tool is the one that directors of the district banks have the most influence over because they can propose changes in it at any time to the board of governors,4
for those of you in americas premiere export industry there is light at the end of the tunnel,1
the psa refers viewers to the federal reserves website for information on how to avoid foreclosure scams,4
recessions cause dips in the participation rate and it tends to rebound as the economy does,0
the fed influences the costs of borrowing to buy everything from cars to condos to computers by controlling shortterm interest rates,4
of course those thoughts will be my own and not necessarily those of the federal reserve system or of my colleagues on the federal open market committee,4
more recently the federal reserve has announced that it will purchase 600billion in debt issued by the housingrelated governmentsponsored enterprises and in mortgagebacked securities backed by fannie mae freddie mac and ginnie mae which could reduce funding costs for mortgages,4
the current expansion has provided a favorable climate for small businesses generally and for minorityowned firms in particular,1
thus opportunities to obtain training for useful work and the presence of meaningful job once trainemust be integral features of such a system,0
the  public sector can encourage the development o f small business directly by supporting programs like incubators and technical assistance efforts,3
at the federal reserve our aim is to help ensure a healthy and growing economy,4
a number of other crosscutting initiatives are under way including for example a coordinated review of how major firms use stresstesting techniques to measure their credit and market risks,2
when i engage in monetary policy scenario  analysis i find it useful to startbut not finishwith my baseline economic  forecast that i described earlier,4
though mortgage ratesnow at their lowest level since the late 1970s should boost the singlefamily housing market demand to a considerable extent has been met for the time being and the chief determinants of new home sales will probably be demographics and overall economic growth,0
in 1996 alone nearly a million new firms began operation,1
a major concern in interstate banking involves the large banks attention to ccmmmity credit needs,2
commercial banks are only one of several agencies  which channel funds from savers to investors,2
bush didnt get credit for the budget agreement of 1990 because the economy turned sour,3
lower productivity growth also reduces the future income prospects of households lowering their consumption spending today and boosting their demand for savings,0
1  i find computers a bit mysterious and i know that many think that monetary policy is even more mysterious,4
during that time the fomc has maintained a highly accommodative monetary policy in pursuit of its congressionally mandated goals of maximum employment and stable prices,4
the recent stabilization of rig counts in the united states suggests that this source of restraint on business investment may be coming to an end,1
i had not the slightest knowledge that the federal reserve bank of kansas city was opening its doors that day,4
age bakker of the netherlands bank chaired the task force on the causes of consolidation alex bowen from the bank of england chaired the task force on monetary policy jeanmichel godeffroy of the european central bank chaired the task force dealing with payment and settlement systems takatoshi ito from the japanese ministry of finance chaired the task force that documented the patterns of consolidation and fabio panetta from the bank of italy chaired the task force on efficiency competition and credit flows,4
we may also consider providing more baseline information that describes a banks performance context such as the demographic and economic information that helps to describe the credit needs and opportunities present in each assessment area,2
examples of important components of the shadow banking system include securitization vehicles assetbacked commercial paper conduits money market funds markets for repurchase agreements investment banks and mortgage companies,2
he has correctly in my judgment emphasized priority for spending cuts in achieving a reduced deficit,3
we expect incomes to continue increasing at a healthy pace during 97 which bodes well for spending,0
bankers also feel that the best possible market organization for mortgage loans is an additional safeguard for the funds of our depositors,2
but the heightened weight and prominence given to forward guidance as a policy tool has certainly shined a spotlight on this longstanding debate,4
central banks have long recognized the effect   their words and actions can have on interest rates and asset prices and   as a result have increasingly moved toward greater transparency in the   policy process,4
the zero bound on interest rates and optimal monetary policy pdf brookings papers on economic activity no,4
the jobs that globalization creates in the united states serving a global economy of billions of people are more likely to be filled by those who like you have secured the advantage of higher education,0
the changes  in pulpwood production have been encouraging for the pulp and paper industry is the major forestbased industry of the area,1
the resiliency of the mortgage credit market during that period highlights the value of having a diverse set of financial institutions and financial markets that serve a key sector of the economy such as housing,2
monetary policy has been effective in keeping aggregate demand growing at a healthy pace,4
indeed in some markets despite the ongoing efforts of the feds lending programs large credit spreads have persisted,4
and we need to factor in trends in wages and benefits in consumer spending and in how us wage price and productivity trends compare with those abroad,0
while many bankers support the issuance of socalled principlesbased regulations some bankers have expressed a desire for more detail on certain aspects of the basel ii proposals in order to reduce uncertainty about what will be acceptable practice and what will not,2
similarly for small businesses getting immediate access to funds from a sale in order to pay for supplies can be a gamechanger,1
over a shorter period money has increased at a 9 percent rate thus far in 1972 if this rate of growth were to continue much longer i would expect inflation to intensify more next year than currently fore cast,4
the feds financial services a let me begin with the financial services the fed provides,4
in the midwest banking is structured primarily on the unit basis,2
in the early 1980s the federal reserve despite public  clamor for easier policy acted to slow the growth of bank reserves and consequently  to  slow  the growth of money,4
but it can be done and a firm relationship of increases in wage rates to gains in productivity is essential if we are to regain price stability,0
finally i will explain why it is vitally important for the federal reserve to remain significantly involved in the supervision of banking firms of all sizes,4
available technology analytical capabilities and customer and workforce preferences are driving this evolution in how financial sector products and services are delivered,2
in fact bank reserves were growing at a record rate,2
second there will be the boutique banks those that specialize on specific financial services and markets that are not highly price sensitive,2
but to set out the problems and difficulties attendant to a peacetime imposition of consumer credit controls cannot hide the fact that major fluctuations in the volume of outstanding consumer credit contain unstabilizing economic influences that must be restrainedhow appropriate restraint can be exercised suggests that it is not consumer credit alone but the entire scheme of credit that requires scrutinyconsumer credit as a constructive and dynamic factor in maintaining and raising our standard of living has already been adverted to as has been the strength of its influence in broadening our markets and reaping the benefits of mass production,2
but in the united states the problem was different because this country held the major portion of the gold stock of the western world and also possessed the productive capacity to reequip the devastated nations,3
in particular the skills and training of the staff seem to be important to a programs success which suggests paying close attention to the design of appropriate qualifications and standards for early childhood education professionals,0
the second program called the comprehensive capital analysis and review or ccar combines the quantitative results from the stress tests with morequalitative assessments of the capital planning processes used by banks,2
the real test as to whether we are pricing our workers out of jobs is hether our products and services will sell in the markets of the world incluing our own,0
investors will continue to reallocate portfolios and their heightened desire for transparency will help shape the next generation of financial innovations,2
if future taxrate cuts          are already enacted into law putting them into effect sooner than planned          could be done quickly,3
in the same quarter the unemployment rate for white workers was 54 per cent so the blackwhite ratio was 170 to 1 among blacks as among whites adult men experienced a relatively sharper increase in the incidence of unemployment than that recorded for adult women and youths,0
1 the views expressed are my own and not necessarily those of other federal reserve board members or federal open market committee participants,4
but more importantly business spending on capital equipment rose strongly in the second half of last year and appears to have increased at a brisk pace so far this year,1
at the federal reserves new orleans branch essential employees stayed with the office to keep it secure despite the rising flood waters and limited contact with the outside world,4
the capital subscribed to the banks by industrialized countries allows the banks to raise funds in the private markets,2
this past spring the united states increased tariffs for steel and lumber,3
recession followed and banks were left with unserviceable foreigncurrencydenominated debts,2
this morning id like to explain the policy challenge facing the federal reserve review how the economy got into the current situation and talk about the outlook for growth and inflation,4
as these factors have receded and the economy has improved lending standards have become less stringent,2
on the other hand the 8 percent riskbased capital standard may still be adequate for banks that do not engage in cherry picking via securitizations and credit derivatives,2
this banks web site offers an interactive tool for customizing wealthbuilding strategies by setting financial goals seeking guidance budgeting saving and investing and managing debt,2
because central banks are ultimately responsible for financial stability they must work closely with legislators and with other supervisory authorities at home and abroad to ensure that these goals are met,4
the large numbers of unemployed and underemployed americans are at great risk of being unable to access fair sustainable and affordable financial services,0
moreover driving down bond yields  might force increased pension contributions from corporations and state and  local governments decreasing the deployment of monies toward job maintenance  in the public sector,3
both of these actions were based on clear authority found in section 133 of the federal reserve act but they required consistent with the statutory provision that a fivemember majority of the federal reserve board determine that unusual and exigent circumstances prevaileda determination that had not been made in decades,4
many of these governments have been spending at a moderate rate while also building their rainyday funds and this year they appear poised for further hiring and more construction spending,3
the resulting oversupply of subprime mortgage lending increased the demand for housing which drove up home prices in regions like california and florida where the supply of buildable lots was inelastic,2
when designing a system that maintains bank safety and soundness and constrains extension of the safety net organizational structure is not irrelevant,2
but when the tech bubble burst we did not feel the pain that those regions felt either,2
one special factor at the moment pertains to the federal reserves balance sheet,4
as a result of these trends in job creation which could well have been exacerbated by the severe nature of the crisis the earnings potential for many households likely remains below what they had anticipated in the years before the recession,0
provided the economy continues to improve as i expect i am very comfortable at this point with a decision to start to taper our asset purchases before the end of the year and preferably as early as at our next meeting in november,4
our goal in monetary policy is to promote maximum employment and stable prices which we interpret as inflation running closely around our symmetric 2 percent objective,4
among the largest investors in commercial paper are money market mutual funds,2
major tax changes and spending cuts are scheduled to take effect next january,3
perhaps even more striking is the dramatic increase in lending from institutions other than the craregulated financial institutions,2
1  branches and agencies of foreign banks would be defined as  banks1 for the purpose of bringing them under the bank holding company 1 act,2
within the next few years the growth rate of the labor force is likely to decline appreciably reflecting the lower fertility rates that followed the earlier postwar bulge,0
i  trust the congress will get it right,3
certainly wage growth has remained quite moderate even though weve been below conventional estimates of the natural rate for some time,0
interest and prices foundations of a theory of monetary policy,4
politicians fearful of making the difficult decisions that would address the federal budget deficit the real cause of our foreign trade imbalance exploit public sympathies for displaced farm and textile workers as if tariffs or quotas would somehow ease their suffering,3
the difficulty is that the monetary authority must know precisely how the publics information differs from its own if it is going to choose the right policy,4
despite the prevalence and importance of committees in modern central banking the role of committees in the formulation of policy has not attracted nearly as much academic attention as has the research on monetary policy rules3  the literature on monetary policy rules stretches back to at least adam smith and includes important contributions from david ricardo knut wicksell and milton friedmanmore recently john taylor has moved the research agenda forward with his eponymous rule and a large number of academic papers have been written examining the effectiveness and robustness of policy rules4 in contrast as noted study of the role of committees in making monetary policy has been fairly light notwithstanding the insightful work of alan blinder and others5  committees and rules may appear to be in opposition as approaches to policymaking,4
as a result during a period of market stress the actions of clearing banks can jeopardize the stability of securities dealers and vice versa,2
in this way the federal reserve system is deliberately designed to  give the residents of main street a voice in national monetary policy,4
sixth the effects of budget deficits also depend in part on the savings pool not just in the us but in the rest of the world,3
and of course there is the renewed concern about the yield curve,3
floating rates have had many advantages as alternatives to controls and as a vehicle for a rising volume of international trade and capital movements but countries that believed they could escape balanceofpayments discipline by floating soon found out otherwise,3
one reason for slower growth of the labor force is that baby boomers are aging and retiring and that trend will continue,0
to me one of the most impressive facets of my own experience with the federal reserve system has been to observe it in action as a dynamic changing organism rather than a static entity,4
but i see this project as just the beginning of a larger design one that reflects the evergrowing and everchanging nature of housing financial markets,2
that said business investment outside of the energy sector has been unusually soft for the past three quarters and this weakness will bear close watching,1
the decline in defense spending nationally will also certainly have an adverse impact on the southeast,3
today ill spend most of my time discussing the feds role in fostering healthy economic growth specifically the importance of achieving sustained growth,4
the performance of commercial real estate loans has generally been very good due in large part to the low interest rates of recent years and the substantial appreciation of property values that has resulted in sizable equity positions for building owners,2
following past practice we will publish the central tendency and the range of the projections for each variable and each year6  we will also publish a comparison with the previous set of quarterly projections a chart showing central tendencies and ranges for each variable and charts showing the distribution of participants projections and how that distribution has changed since the previous release,4
migration of activity out of gsibs might on net be beneficial for financial stability because it would leave the gsibs less systemic even if the activity migrates to lessregulated shadow banks though i would caution that an especially careful analysis would be needed before reaching this conclusion,2
over the past couple of years forecasters have gotten pretty used to sudden changes in the outlook and my colleagues and i on the fomc will adjust as needed,4
thus the regulatory framework should aim to reduce the chances of distress or failure at such firms to a greater extent than traditional microprudential regulation would,2
however not long into volckers term a staff economist at the board of governors produced a paper that explained why carters decision may in fact have been quite sensible from the presidents and indeed the societys point of view,4
for example in recent years technological advances in inventory control have seemingly dampened the historic production volatility in the auto industry and other durable goods sectors,1
last year more than 16 million cars and trucks were sold in this country in the first quarter of 2008 the sales rate fell to 153 million units and in the second quarter the sales rate fell to 141 million units,1
while the ethical tone of a financial institution comes from the top a successful ethics program must be demonstrated by staff at all levels and throughout the organization,2
thus for many o f the regions industries the likelihood o f substantial improvement is not high,1
more  2  cur international financial position  none of us can challenge i think the dedication which has marked the governments efforts to secure payments equilibrium,3
there are other contributory factors weve seen a record number of high school graduates in the us and college attendance rates are on average rising as well,0
since the federal reserve cannot know what the sustainable level of unemployment is or how it will evolve over time it should not set a numerical objective for unemployment,0
or put another way can we conduct monetary policy in a way that reduces the likelihood of financial instability15 the first response of policymakers to the question of whether monetary policydefined as the shortterm policy interest rateshould be used to support financial stability is to say that macroprudential tools rather than adjustments in shortterm interest rates should be the first line of defense,4
along with private business analysts we are often taken by surprise by current economic developments,4
in 2009 the g20 countries agreed that standardized overthecounter derivatives contracts should be cleared by central counterparties,3
it does not require banks to make bad loans,2
while the high level of excess reserves on the feds balance sheet is largely benign now that will change as banks become more willing to lend,4
after taking significant measures to stabilize the economy in the wake of the 2008 financial crisis the fomc committed to a period of sustained low interest rates to support the labor market and return inflation to 2 percent,4
general limitations similar to those on the federal reserves ability to obtain reports also apply to defining when the federal reserve may or may not directly examine a functionally regulated subsidiary,4
we know the strong links these banks have to the people and businesses in their communities provide firsthand knowledge of local economic conditions,2
this is true even though the feds statutory objectives are defined as specific goals for the us economy,4
mexico might best be described in economic parlance as an emerged  country exports  exports exports texas benefits from a stronger  mexico in many ways including on the export front,3
much of the blame for the crash and depression which was once laid on the banks has since been lifted but not the regulatory constraints that were first imposed in the thirties and subsequently broadened and strengthenedi believe the time has come to redress some of the excess restraints and design a structure for the united states financial system in the nineties,2
the sons and daughters of factory workers are pointing and clicking their way to higher levels of prosperity,0
mbs purchases will continue until we see a better employment situation,0
anything  less allows skeptics to continue to wonder does the fed really mean it,4
at the cleveland fed w e believe that forging strong partnerships among all interested parties is critical for solving the problem,4
this strategy in turn has exacerbated a longstanding trend toward a greater concentration of community bank lending in certain areas less dependent on volume such as loans secured by commercial real estate,2
in passing i think itf interesting to note that s   5   development expenditures by public bodies in this country at least almost always stop short of investment in commercial enterprises per se despite the fact that conceptually such outlays might contribute as much to regional development as for example construction of highways,3
the energy industry accounted for approximately 2 percent of texas employment 9 and approximately 10 percent of gross domestic product gdp in 2015 10 a good deal lower than in the 1980s when that oil bust pushed the texas economy into a major recession,1
without the structure that was set up by congress in 1913 with the federal reserve act i do not believe it would be possible to formulate a truly informed and wellconsidered monetary policy for such a complex and dynamic economy as that of the united states,4
the worldsaving view could have a natural stopping point when the populations of the accumulating countries begin to retire run down their assets and sell their dollardenominated assets to support the consumption of retirees,0
also equity prices fell sharply particularly technology stockswith the nasdaq now having declined nearly 60 percent and internet stocks about 70 percent from their peaks,2
if you carry on your banking business in a large city you are more likely paying a higher rate 83 per cent of the largest banks reported higher interest rates compared with  b2  per cent of the smallest banks,2
innovation is already altering the power source of motor vehicles and much research is directed at reducing gasoline requirements,1
i am mindful that low spreads on corporate credit together with risky corporate debt at historic highs suggest financial imbalances are growing,2
and the inference may be questionable because there are some characterlstics of our financial institutions and certain prevailing financial practices which obviously impede the flow of rural credit,2
my answer is yes by improving the political process,3
my focus on forward guidance reflects its growing importance as a policy tool of the fed,4
mortgage rates have moved a bit higher since june but are still quite attractive by historical standards,0
among the more practical were suggestions that application forms be eliminated in the districts where they are still used and that a continuing loan agreement be executed between reserve bank and member bank to replace the individual notes now required,4
the current arrangement has the new york fed president serving as a permanent member and four of the other 11 presidents serving oneyear terms on a rotating basis,4
in january 2012 the fomc published a statement of longerrun goals and policy strategy,4
in fact in the second quarter of 1976 we had the highest percentage of our population      2   employed since 194g and at the same time one of the highest rates of unemployment in recent history,0
the relatively smaller generations born after 1960 will be the work force supporting a large number of elderly dependents,0
the feds prudential supervision benefits in turn from the expertise we develop in carrying out other parts of our missionfor example the knowledge of financial and economic conditions we gather in the formulation of monetary policy and the insight into retail financial markets that flows from our consumer protection responsibilities,4
governmental policy including that of the federal reserve continues to aim at limiting the pressure of aggregate demand on available resources,4
since those outside businesses were free o f the regulations limiting banking institutions they could o ffe r depositors market rates o f interest on funds placed with them,2
finally the statement pointed out that the goals of monetary policy are complementary over the longer run,4
as bankers and bank directors you have specific responsibilities to manage the risks at your financial institutions and effectively oversee the systems of internal controls,2
one very dangerous consequence of the deteriorating trade performance of us industry is the increased clamor for protectionist measures that would be terribly harmful in the long run to our economy and to the economies of other nations,1
fortuitously the southeast is a major nationwide supplier of lumber used in residential construction,1
the federal reserve bank of minneapolis has a deep interest in the growth potential of south dakota because south dakota is an important part of the llitifch federal reserve district  the federal reserve system of which  the minneapolis bank is just one part has an even deeper interest in this whole question of growth and stability,4
in these and other ways the federal reserve labored long hard and effectively since september 11 to keep the payments system working,4
for example modern machine tools contain a great deal of hardware and software that allow them to precisely cut and mill complex structures,1
for example auto production that was disrupted by shortages of supply parts from japan has bounced back,1
in a period of relative prosperity and record levels of personal income such as he have at present it should be paid for out of current income,0
she worked hard to secure legislation codifying core labor rights and she played a key role in designing and implementing social security3 as perkins was advocating for policies to improve working conditions facing women and children another young economist was gathering evidence on the lives of black working people,0
for example the american community survey assesses the employment status of workingage individuals defined as 16 years and older,0
congressman rains chairmen of the housing subcommittees in the senate and house respectively,3
these calculations however were substantially changed by the galvanizing events of 2008 notably the development of large and uncertain counterparty credit risks in many bilateral derivatives agreements,2
in an automatic cyclical fashion increased orders and increased employment should result as businesses run off their present excess inventories and are forced to reorder new materials and equipment,1
well the question has congress attention and has stirred deep concern in the industry,3
the good news is that we are not faced with inaction and there are early indications that the financial industry in general is working diligently to be prepared,2
aside from altering our immigration laws there is very little public policy can do about the adverse impacts of this demographic change on aggregate demand,3
americans are growing older at a startling pace,0
central banks are generally believed to have effective tools for preventing persistent inflation overshoots but the effective lower bound on interest rates makes persistent undershoots more likely,4
payroll employment fell by over 2 million jobs over the past two years,0
that group consisted of about four members of the presidents cabinet and other top governmental officials,3
in a variation on the theme merrill lynch is  buying a savings and loan association,2
stated differently a sound payments system is a key underpinning of our economy,2
while residential investment has been improving business fixed investment remains weak,1
if real reform were chiefly about the number of financial regulators in washingtonor even the precise relationships between financial regulation and the role of the central bankwe should find an institutional design among major financial centers around the world that lived up to its promise,4
more than a decade before churchill                            president cleveland understood the magic of tearing                            down american barriers to competition from all comers,3
those decades saw many advances in monetary policy and in bank regulatory policy but the appropriate role for government in managing threats to the broader financial system remained unresolved,4
the fiscal imbalances tliat underlie the il,3
everyone professionally involved in the broad goal of human capital development is influenced by changes in labor markets,0
successive rounds of retaliation can spiral into a trade war,3
the index of wholesale prices of industrial commodities is constant,1
the trend of economic events is seldom so clearly foreseeable that one can confidently adopt measures that cannot quickly be reversedindeed in spite of the fact that we have one of the worlds best economic research organizations we can never be absolutely certain where we stand at any given moment because there is an unavoidable lag in the collection and analysis of economic data,4
and the us labor market as an institution is functioning more efficiently than it used to,0
2  in short we found theres a gap between the number of workers the regions employers want to hire and the number they will in all probability be able to hire,0
what we have now is a unique american institution improved with the lessons learned from the first two attempts at a central bank,4
one is the primary distribution of the national income between labor and other claimants,0
and our web site chicagofedorg offers a wealth of information about personal finance topics including information on shopping for a mortgage or a credit card banking safely via the internet and direct payment of bills,4
the issues discussed included risks and vulnerabilities in the international financial system the resilience of the financial system to shocks lessons from past market liquidity crises standards and codes including the standardsetting process accounting and auditing issues and reinsurance,2
the problem threatens to swamp the  n x f congressional budget committees at the very inception of their et activities but it is one which they must grasp and bring under control,3
one study conducted across 119 countries from 2000 to 2013 suggests that lower ltv limits lead to slower credit growth17 in addition evidence from a range of studies suggests that decreases in the ltv ratio lead to a slowing of the rate of house price appreciation18 however some other research suggests that the effectiveness of ltv limits is not significant or somewhat temporary19 other macroprudential policies focus on lenders,0
that is why i was very supportive when our research  266  michael moskow speeches  2005  department proposed that we hold a conference on job loss,0
7 meanwhile foreign competition is pressing so hard upon us that american business increasingly s_eems to be going protectionist,1
in europe the high level of unemployment reaching into the double digits is a plague on the economic houses of many european nations,0
the major fallacy is underlined by merely extending the formula  of people multiplied by average output to take into account the leisure hours we no longer work,0
from present information it appears that a turnabout has occurred in corporate liquid asset management with a resulting increase in demands for transactions balances,1
in check  collection  procedures  however in order to ensure that these changes are digested  by  banks  and their  customers  with a minimal amount of difficulty we have modified the schedule for imple mentation of  later  presentment  to provide  which the changes will be phased in,2
for example ford  owns the nations third largest thrift,1
i will direct my remarks to the ongoing transformation of the us banking system and suggest what i believe some of the key policy responses to this transformation should be,2
a government pretending to serve a nations interest by say misinforming the people about its military plans would be harshly taken to task,3
as the owneroperator of the fed ach system the federal reserve has been working to ensure its ach system is equipped to accommodate changes in volumes and the nature of payments even as these applications proliferate,4
even  if the federal budget d eficit is cut by the 50 billion that the senate recently endorsed the effects on defense could be slight and the overall impact would not be fe lt for some time,3
another would be the lowering of the 7percent invest  ment tax credit as a means of curbing the business spending boom,3
as the fomc responds to incoming information it will continue to be absolutely transparent in explaining its decisions and how and why they contribute to meeting the legally mandated dual goals of monetary policy,4
we believe that through its payments system roles the federal reserve is well positioned to encourage both future payments system evolution and the appropriate balancing of efficiency and risk as new products and services are developed,4
back in 2006 less than two months after i started as chairman i spoke to you about the strong performance of community banks as well as about some important longerterm challenges,2
our bank represents the ninth of the 12 federal reserve districts and by area were the second largest,4
thus in all aspects o f commerce we found that businesses in tokyo hamburg and seoul were making major inroads into markets which had been virtual monopolies fo r american producers,1
moreover credit scoring uses automated systems and loan decisions can be rendered in minutes or hours rather than in days and weeks,2
an overriding consideration for a bank regulator must be to minimize any threats to the safety net the payments mechanism and the financial system,2
6  construction remains weak here and employment in the government sector has actually declined largely as a result of cuts in tva activities,0
based on scf data median family wealth has grown much more rapidly for white families than for other families over the past few decades while median family incomes have risen by about the same amount for white black and hispanic families,0
the debt servicing problems of many developing countries in latin america and elsewhere have been acute and have been exacerbated by high interest rates and the strength of the dollari dont intend to address these problems of the domestic and international financial systems in much detail today,3
one of my responsibilities as a governor on the federal reserve board is to chair the boards committee on supervisory and regulatory affairs,4
in january 2012  in a key milestone in the evolution of the feds communications the fomc  adopted a longer and more precise description of its longrun goals,4
we must remind ourselves that educated consumers are more likely to make better choices for themselves and ultimately for our nation and so we must get out and educate them,0
because productivity growth is also an important component of unit labor costs it plays a major role in controlling inflation at least in the short and medium run,0
similarly gold prices fell while bonds and money market instruments      7   finally began yielding positive real rates of return,2
however a large proportion of our citizens have limited opportunities for inflationproofing their longterm assets or debt positions,0
we need and i believe we have scope for an approach to fiscal policy that puts in place a welltimed and credible plan to bring deficits down to sustainable levels over the medium and long terms while also addressing the economys shortterm needs,3
in a speech delivered here in utah in 1932 marriner asked what was the purpose of an economic system if not to allow those willing and able to work the opportunity to do so to guarantee to them sustenance for their families and protection against want and destitution,0
whatever the reason we must reduce federal deficitfinancing  pressures and change tax and regulatory policies i f we want to reduce inflation and encourage domestic saving and investment,3
monetary policy formation and implementation  a  through monetary policy the fed seeks to influence anticipated economic activity by affectin g the demand for and supply o f money and credit,4
on net i do expect the unemployment rate to normalize at close to 5 percent within the next five years,0
i will not discuss fisccl policy except to observe that a       federal budget in reasonable 1,3
unlike other southeastern states defenserelated industries are significant locally and the decline in defense spending augurs poorly for florida,3
bank holding company affiliation appears to have an insignificant affect on overall operating costs,2
indeed workers in poor countries often work longer hours than their counterparts in rich countries and yet they remain poor,0
we have been working to revise the basel accordtrying to give birth to basel iifor half a decade,2
in new york state for instance employment was down 112 percent whereas it was down only 45 percent in texas,0
as to disclosures bv firms themselves the opaque nature of parts of a financial institutions balance sheet makes special disclosure requirements especially important,2
now let us consider the place of industrial development,1
from a central bankers point of view the objective of ensuring financial stability remains critical,2
this intermediation depends critically on the creation of instruments that are thought to be safe and liquid and as such cash equivalents similar in function to insured deposits in the commercial banking system,2
what will the financial services industry look like in the future,2
for example the ratio of gross interest payments to corporate cash flow before interest provision is currently about 35 percent close to the 1982 peak when interest rates were much higher and profits were weak owing to the recession,1
on the business side capital spending will be enhanced by the reduction in borrowing costs and businesses are likely to focus on efficiencypromoting equipment like computers,1
i contend that trade restrictions are neither conducive to high real wages nor to a high living standard,0
white sulphur springs west virginia bankers convention july 20 1956  meeting the farm challenge m monroe kimbrel executive vice president first national bank thomson georgia  even as i begin when so many of you have been reading in the newspapers about the farm depression i can almost hear you wondering why we as bankers continue to fuss so much about maintaining service for a sick industry,1
our challenge now is to do what monetary policy can do to sustain the expansion so that the benefits of the strong jobs market extend to more of those still left behind and so that inflation is centered firmly around 2 percent,0
1 these remarks solely reflect my own views and not necessarily those of any other member of the federal open market committee,4
targeting longerterm measures like generational accounts is further complicated by the fact that the estimates would be affected by promises to raise taxes or cut spending far off in the future,3
in 1968 for the first time a greater proportion of negro men than negro women aged 2529 had completed high school,0
a perfectly safe bank holding a portfolio of treasury bills is not doing the economy or its shareholders any good,2
14  another though more subtle assault on our standard of living is coming from inflation,0
h historically inflation usually accelerated when labor markets so tight,0
on the contrary average wage rates so far in 1980 have been rising about 1 to 112 percentage points faster than they did in 1979 moreover there is relatively little reason for expecting any reduction in the rise of wage rates in the near future,0
at this point my summary assessment is that the sources of uncertainty that fueled financial market volatility represent a modest risk to our economy but a risk factor nonetheless,2
i think we could see an uptick in activity in the second quarter as business activity rebounds and some catchup in sales and production occurs,1
_ real income has declined anj partly because expectation of inflation have encouraged a buy now psychology,0
i began my remarks by noting that monetary policy should focus on the intermediate to longer term and be less sensitive or reactive to shortrun and transitory movements in the data,4
the first  cost is that there is a risk that monetary policy will be less effective,4
firm control of monetary growth at a diminishing rate will help bring down inflation,4
one          often hears that the advanced approaches of basel ii are too complex          for anyone to understand and the mathematical formulas in various drafts          of the guidance can look like a foreign language to some readers,2
the 1981 tax act changed us investment incentives,3
3 we must bring government expenditures under better control,3
in fact federal reserve staff were personally involved in setting priorities for the restoration of key telecommunications circuits supporting the financial services system during the week of september 11    third the events of september 11 graphically demonstrated the interdependence among financialsystem participants wherever located,4
for example the federal reserve participates in all segments of the treasury market with most of its current asset holdings of about 670 billion distributed among treasury securities with maturities ranging from four weeks to thirty years,3
in 1971 the average bank in this class had a gross yield of 8082 per cent on its total loans outstanding,2
the entry into banking activities of retailers wall street and insurance firms has affected gross margins as new financial instruments are developed to attract consumers,2
this approach is reflected in an april 2020 statement issued by the fed and other bank supervisors10 in that statement we instructed bank examiners not to criticize bank management for taking prudent steps to support their communities and we underscored that we would not expect to take a consumer compliance public enforcement action against an institution that has made good faith efforts to comply,2
moreover a case can certainly be made that competition efficiency and customer convenience have all been enhanced by the steady erosion of glasssteagall product restrictions in the 1980s and 90s and their final demise last year with grammleachblileyone aspect of the transformation however is challenging many bank customers and shareholders and all affected bank regulators the growth of very large  and more importantly complex  banking companies,2
ive  mentioned how the federal reserve has bought over 2 trillion of government  securities,3
first we cannot have a  now nobody in this room would like to see taxes lower more than i would,3
commercial banks have had to cope with a mounting total of funds to invest as a result of their enhanced capacity to compete for time money facilitated by the change in regulation q at the beginning of last year,2
their error can be demonstrated by examining the public recordmonetary policy is a powerful instrument which does affect the economy,4
many additional workers over 55 dropped out of the labor force and over time will effectively retire,0
in any event the exact size of a bank does not enter into hat is the bankers fundamental responsibj_lity of first and foremost providing a safe repository for the funds entrusted to his banks care,2
with regard to liquidity the prudential regulations and supervisory programs of the us banking agencies have resulted in significant increases in the liquidity positions and changes in the risk management of our largest institutions,2
in my remarks today i will first review the history of hmda as a backdrop for the new hmda pricing data,2
the inflow of deposits resulted from increased demand for safe haven assets reflecting confidence in us banks,2
  such data point to the probability that  union power has weakened,0
three of the banks that participated in the stress tests had acquired significant loan portfolios through business combinations,2
were aware that we have tight labor markets in the midwest and especially in indiana where the unemployment rate was only 42 percent in october,0
of this amount 148 thousand occurred among adult white women and 79 thousand among white youths,0
and monetary policy is a relatively blunt tool with relatively limited scope,4
to be sure assisting those who are already close to retirement in failing industries is an imperative,0
consumers adjust their spending patter ns based on many factors including their current income their expected ear nings and their overall wealth,0
if all of these people instead had been looking for a job the unemployment rate would be over 7 percent,0
remember price controls,3
my colleague senior bank examiner arland williams was on the plane that went down,2
if i were to ask each one of you what is your banks greatest problem i am sure you would give a lot of different answers,2
fortunately there has been less overbuilding this time and mortgage money is still available as banks and thrift institutions continue to attract deposits from the new highyielding saving certificates,2
the expansion of these eurodollars which has been far more rapid than that of dollars in the united states will henceforward be taken into account in formulating us monetary policy,4
more extensive disclosure and greater dependence on market forces complement improvements in risk management banking supervision and minimum capital standards,2
the percentage of workingage people with jobs has fallen to a point not seen in a quarter century4 average hours worked have not increased through the spring and summer from what were by historic standards unusually low levels,0
basel ii has been broken down into three pillars for ease of exposition,2
specifically it repeals provisions of the 1933 glasssteagall act which separated commercial and investment banking and it repeals provisions of the bank holding company act of 1956 that have restricted affiliations of banking and insurance,2
the rate of new hiring has been exceptionally sluggish for the past several years however and the available evidence suggests modest improvement at best in hiring rates so far this year,0
one particularly bright spot has been consumer spending which rebounded sharply in the second quarter and looks similarly strong currently,0
this approach sometimes referred to as a floor system is simple to operate and has provided good control over the federal funds rate,4
programs like apprenticeship carolina and rpm are being replicated across the region,0
this rapid increase is in marked contrast to the preceding decade when contingent workers remained at a relatively stable 10 percent of the workforce according to the bureau of labor statistics bls cws3 they conclude that all of the net growth in aggregate employment in the decade leading up to 2015 can be accounted for by contingent work arrangements which means there has been no net employment growth in traditional work arrangements,0
another banker in hale county aja bama has had an unusually ambitious and successful program,2
however a          decline in energy prices provides in effect only a oneshot boost to          consumption albeit one that is likely to take place over time,0
the socalled real output numbers derived from the national income accounts give us an idea about changes in the volume of goods and services produced over time,1
oo the fiscal structure is moving in constructive directions to help savings and to help investment and to provide greater incentives all that will take time to be effective but the framework is in place,3
community bank profitability is affected by both external factors outside of bank control such as local economic conditions and factors within bank control such as the composition and stability of the bankâs loan portfolio,2
productivity in turn is importantly affected by changes in the stock of capitalthat is machines and factoriesas well as technological advances and improved production methods,1
measured by our distance from high employment and high capacity utilization the expansion still has a considerable distance to go,0
for our part we are still learning how ai tools can be used in the banking sector,4
for ceta title ii congress has authorized that not less than 250 million be spent for the fiscal year ending june 30 1974 an appropriation of 500 million has passed the house and one for 875 million passed the senate,3
after the global financial crisis we cannot ignore the fact that central banks are typically tasked with multiple responsibilities often among them preserving or contributing to financial stability,4
i ignore any costsaving effect on medicare permitting the early buyin costs for lowincome households to use up any budget savings from higher premiums for highincome households whose primary breadwinner is just over 65  if we were to combine this increase in the retirement age with a few standard measures to improve the horizontal equity of social securityincluding all newlyhired state and local workers and using a chained price indexthe total improvement reaches about 14 percentage points,0
be that as it may the facts seem to be pointing to a rising mismatch between what our education sector offers to students and the skills training and knowledge our business sector needs more and more,1
houever within the latter a sizable increase occurred in federal spending for education,3
specifically this stability is not necessary for implementing policy or determining the money stock but such stability is necessary for enabling monetary policy to reliably influence such ultimate goals as price stability,4
each president in turn is charged with monitoring the feds open market operations,4
the basel i and basel ii capital requirements relied almost exclusively on capital ratios that were essentially snapshots of balance sheets and thus all too often a lagging indicator of a banks condition,2
these rules are particularly valuable for households that have little experience with homeownership and short credit histories,0
wage increases have iroderated significantly and in view of recent union contracts are likely to continue to do so,0
some have suggested that the slow pace of the economic recovery proves that our unconventional policy tools were ineffective,4
as the fomc has said policy is not on a preset path,4
many bluecollar positions now require more skills,0
in broad terms an important contributor to the rise in earnings inequality has been an increase in the premiums that firms are willing to pay for higherlevel skills,1
in terms of monetary policy the third key question is how should policy react to these developments going forward,4
labor productivity has increased only 12 percent per year since 2010the smallest fiveyear rate of increase since world war ii and about onefourth of the average postwar rate figure 11,0
baby boomers are retiring,0
in fact the presence of information asymmetries goes a long  way toward explaining the structure of financial markets and institutions,2
now any institution as important as the federal reserve needs to be scrutinized closely,4
in addition new advanced manufacturing technologies often require workers with different skills than were required in oldline manufacturing operations,0
anticipating such a reaction senior management of banks may thus have strong nonregulatory incentives to act as if microprudential regulation continued to dominate,2
by 1964 outlays for business fixed equipment had become a main driving force behind the rise in economic activity,1
generally employment has  declined in the southeast by about the same margin as in the nation with a slight lag,0
the banking agencies will continue to promote supervisory approaches that complement and support banks own efforts to enhance their riskmanagement capabilities,2
of course federal reserve cbdc accounts that are available to persons outside the united states might promote use of the dollar but global availability of federal reserve cbdc accounts would also raise acute problems related to among other things money laundering,4
while the income deficit per family member was smaller for black womens families because the latter typically contain a larger number of children than was the case for white womens families these figures do provide a rough indication of the extent of the deprivation under which they live,0
2  a brighter spot has been business investment spending which has been supported by solid growth in corporate earnings,1
washington board of governors of the federal reserve system march 26 cúrdia vasco 2015,4
average income per worker in nonagricultural establishments in tennessee is now about three times larger than jn 1939 but is still somet7hat below the national average,0
looking closer to home our own federal government has been trying to come to grips with a national growth policy for at least the last three years,3
but the economy and financial markets are dynamic they will be hit by shocks and they will respond to those shocks,2
hopefully  draft legislation will be forthcoming for consideration by congress  before  too long,3
our economy has not yet fully regained the jobs lost in the recession that accompanied the financial near collapse,0
combined the influences of hightech investments  use and production  fully account for the acceleration in productivity in the late 1990s,1
i have been particularly troubled by the fact that widespread misinformation about the federal reserve system is not being exposed and correctedlest there be any misunderstanding let me state specifically that i am not complaining about criticism of the federal reserve,4
it is only one of a set of  megabanks that remain a threat to financial stability,2
the first and third periods are meant to represent times when both  the us labor market and the economy as a whole were expanding,0
for the manufacturer in a particujar industry growth in plsnt capacity mar mean greater profit potential for himself but increased competition within his industry accomp1mied by downward pressure upon prices,1
i say is because the origins of fia as you know date from a 1968 initiative lct was to conduct a scholarly nonpartisan comprehensive review of financial institutions,2
o f course there have been structural changes in the civilian labor force in the past two decades that have raised the level of the unemployment rate associated with full utilization of economic resources,0
the federal reserve cannot afford to give low priority to this key goal,4
simultaneouslyand correctlythe  doddfrank act removes the feds ability to engage in institutionspecific  assistance,2
as a practical matter we probably cant do much right now by monetary policy or otherwise to change ingrained savings behavior,4
you have helped these families to begin the process of asset accumulation through home ownership,0
one of the feds tools is providing liquidity,4
but one cannot speak on an occasion such as this to a group such as this in a facility such as this located in the beautiful hills of virginia without first paying obeisance to two of virginias great sons woodrow wilson and carter glass the founder and the defender of the federal reserve system,4
unit banking is even less prevalent among large banks,2
why does the fomc feel this way,4
in any case it is not clear that taxation is superior to borrowing as a form of financing government spending especially when the deficit is declining as a percent of gnp,3
the answer appears to be that interstate banking could but doesnt have to be the catalyst for restructuring,2
i think this approach would be particularly wise in light of the fact that as mentioned earlier my base case is for solid gdp growth in 2019 and i expect labor market conditions to remain at levels i would consider at or past full employment,0
to fight disinflationary pressures and economic contraction fed policymakers brought the policy rate to effectively zero where it remained for seven years and augmented their usual policy tools with unconventional tools including forward guidance and largescale asset purchases,4
firsttime purchases o f homes and automobiles seems to have peaked among the baby boom generationthe large generation o f children born in the decade after w orld w ar ii and now passing into middle age,0
1 the doddfrank act requires the fed to conduct a supervisory stress test for bank holding companies with 50 billion or more in total consolidated assets and for nonbank financial companies designated by the financial stability oversight council fsoc for fed supervision,2
in this scenario there might well be no date in which outstanding treasury debt would fully be retired,3
consequently monetary actions have been thought to be of little use in any program of economic stabilization,4
to me its like the concern not long ago that budget surpluses as far as the eye can see would retire all government securities and we wouldnt have anything to buy or sell in open market operations,3
what are some of the ideas that could help institutionalize these important lessons within the federal reserve system,4
though the  recent numbers are encouraging easy money has failed to encourage the robust  payroll expansion that is the basis for the sustained consumer demand on which  our economy depends,0
we at the federal reserve have the task delegated by the congress of conducting monetary policy to enhance the welfare of our citizens,4
however one thing is clear human capital  education and skills that make people more productive and able to contribute to the economy  is one of the fundamental factors that determine economic outcomes of communities and individuals,0
in response to the crisis the basel committee on banking supervisions first task was to strengthen bank capital requirements through the adoption of the basel iii capital accord and last summer our domestic rule implementing the basel iii capital requirements in the united states,2
in the context of regulatory capital basel 25 and basel iii addressed interconnectedness and other sources of systemic risk frequently associated with shadow banking by raising capital requirements for exposures to unregulated financial institutions such as asset managers hedge funds and credit insurers and by strengthening the capital treatment of liquidity lines to offbalancesheet structures,2
as the acceleration would not damage the longrun budget          position the reversibility condition is satisfied,3
we are keenly aware of the need for capital requirements to make sense from a standpoint that considers safety soundness and competitiveness we recognize that a onesizefitsall approach is probably not the best for our banking system in light of our wide range of institutions,2
of course the more advanced approaches of basel ii are clearly designed for large complex banks and will not be required for community banks or even for most regional banking organizations,2
even so while consumer spending never actually declinedan unusual development in any downturnthe deceleration was significant,0
one of the most challenging homehost issues that has arisen of late is the allocation of operational risk capital within a consolidated banking organization,2
i have also moved up my 2019 growth forecast a bit in light of the performance of the consumer over the past two quarters,0
already left with an overhang of equipment from the investment boom of the late 1990s businesses confronted these new uncertainties about the future and saw new reasons to defer and delay investment spending,1
for the industry overall the federal reserves interest rate cuts last year certainly appear to have helped bank earnings but they present management with new challenges too,4
return to text 3 agency debt in this instance is debt issued by fannie mae freddie mac and the federal home loan banks,2
in my remarks i will focus primarily on the choices and challenges associated with basel ii implementation,2
it was 15 years for example before the district re  166  michael moskow speeches  2003  attained its former share of the nations manufacturing jobs,1
because the fomc meets so frequently there is often not much new to discuss and because participants have met together so many times they seldom are surprised by what their colleagues say,4
with important advances in economic science however the fed has gone a long way to narrow the range of uncertainty,4
at one end of the spectrum we have the unemployment of black teenagers at an incredible 30 per cent,0
congress has assigned the fomc the task of achieving stable prices and maximum employment however policymakers may disagree on the best way to achieve those goals19 the systems structure encourages exploration of a diverse range of views and promotes a healthy policy debate20 in the modern federal reserve system each reserve bank has an independent research department with its own external publications,4
at the higher funds rate with other market rates moving in the same direction banks and nonbanks have reason to restrain their demand for funds,2
in response the banking supervisors have issued more detailed guidance on contingency planning including managing information technology risk information security outsourcing and network management,2
we must understand the needs of the workers who are displaced and recognize that adjusting to evolving circumstances takes time but history provides good reason to be optimistic that the changes wrought by technological innovation ultimately yield broadly shared gains,0
one the descendant of the predepression market sector consisted of savings and loan associations mutual savings banks and to a lesser extent commercial banks,2
a  sales of both new and existing homes in the midwest have exceeded practically everyones expectations which in turn has kept items such as appliances electronics and lawn furniture selling rapidly,1
these guaranteed loans could be held in portfolio or sold to institutional investors through a nationwide secondary market,2
this observation raises the question of why in some cases the putative productivity benefits of investments in new technologies do not occur until years after those investments are made,1
in recent years supervisors have observed banks in order to maintain a customer relationship going beyond their established footprint and lending in real estate markets with which they have less experience,2
i 7 coming bck t0 1955 and the developrrients which took place during that year it is no secret that the federal reserve system directed its efforts toard credit restraint from the spring of the year,4
as technical change increases demand for skilled relative to unskilled labor the unskilled workers must acquire new skills find new jobs at lower relative wages or become unemployed,0
auto sales are also a herald of things to come,1
my answers will be somewhat unconventional in that i will take issue with the common view that the recent deterioration in the us current account primarily reflects economic policies and other economic developments within the united states itself,3
 9   should monetary p o l i c y attempt t o d i r e c t l y s t a b i l i z e  shortterm  i n t e r e s t r a t e s or t o i n d i r e c t l y s t a b i l i z e longterm r a t e s by d i r e c t l y focusing on longerterm money growth,4
yet another challenge for central banks will be to make good use of what we learned during the crisisto determine whether and how the toolkit of central banks can be expanded and to find ways to build on central bank cooperation during the crisis to develop stronger working relationships and collaboration in the future,4
services account for 82 percent of our  economic output,1
this decline in our youngest students is especially concerning as we know from a large body of research that early learning is critical to lay the foundation for education later in life2 and in virginia public prek is available to children from lowincome families or to children who have special needsthe same children who may have difficulty accessing other schooling options,0
in discussing policy responses then i will focus on those relevant to the federal reserve,4
recent experience has suggested that monetary growth alone cannot guide our actions,4
they have relocated production around the globe to more costefficient locations and prompted a worldwide expansion of trade in parts and semifinished goods as well as in final products,1
the record of the recent past has been sufficiently overt to convince thoughtful people that further fine tuning budget experimentation can only lead to the injection of unnecessary instability into an otherwise inherently stable economic system,3
also when rising governmental expenditures stem from programs that redistribute income the effects on the tax structure may dull incentives to the point where individual initiative suffers5 the short term aspect of this problem is being well covered in the debates now in progress in the congress relative to a federal government spending limit of 250 billion,3
the crash vividly illustrated the extent to which markets are intertwined and the extent to which large financial firms have lines of business that cut across many markets,2
another way to see this is through the sustained increase in the ratio of people over 65 to those who are in their prime working years figure 10,0
note in this regard that the doddfrank act requires both more stringent prudential standards for systemically important firms and a process for promoting the orderly resolution of these same firms,2
beginning in the 1970s manufacturers increasingly used technology to improve efficiencies in all aspects of their businesses,1
    while all no doubt would prefer that it were otherwise there is no way to dismiss what has to be obvious to every monetary policymaker  the success of monetary policy depends importantly on the quality of forecasting,4
they know that customers counterparties creditors and investors take into account overall bank capital adequacy when making investment or other business decisions,2
georgia for example has been the epicenter of bank failures in the united states over recent years because of its banks lending exposure to real estate,2
i assure you that the displacement of locally owned and operated banks by branches of large institutions with nonlocally determined policies is a matter of concern to me and other board members,2
the year 2000 under the category of problems we dont need i find it difficult to talk with bankers these days without raising the year 2000 problem,2
this is unfortunate in the respect that it would curb imports and foster more domestic consumption o f usmade goods,1
the anticipation of these actions which are essentially various types of penalties provides banking organizations with incentives to refrain from excessive risktaking,2
however changes in the contract rate that occur in a short period surrounding an fomc decision are likely to be determined primarily by changes in the policy outlook rather than changes in the risk premium,4
at the turn of the year we began hearing anecdotal reports both in our district and elsewhere in the country of commercial development projects being deferred or cancelled outright,1
the debate over whether budget policy should seek a balance or zero deficit and surplus or should attempt to compensate for the disequilibrium in private spending and saving decisions probably has resulted in some harm to the adoption of the best policy,3
the dollar is viewed as a hard currency as was the deutsche mark during its lifetime due to the policies of the bundesbank,2
financial distress at a large bank may materially raise the likelihood of distress at other firms given the network of contractual obligations throughout the financial system,2
the very rapid growth of trading credit derivatives had until recently outpaced the development of the infrastructure necessary to clear and settle those trades,2
job growth has averaged 138000 over the past six months,0
woodrow wilson said we will deal with our economic system as it is  and step by step we shall make it what it should be carter glass said in the federal reserve act we instituted a great and vital banking system not merely to correct,4
of course monetary policy alone can not guarantee such an outcome,4
in other words we made a social and political decision which resulted in an absolute decrease in our production capacity for goods and services,1
however it is encouraging that the downward movement in labor force participation has recently been on hiatus a development that could possibly be prolonged by the recent tax legislationwhich could for example give some workers an incentive to remain in or enter the workforce,0
prudent bankers here too would be wise to review underwriting standards and be sure that they are adequately enforced,2
according to  mr saxon those which require legislative action will be ready for congress next year,3
while this objective is clearly understandable central bank lending can create the expectation that similar support will be forthcoming when market disruptions occur in the future,4
i first provide an assessment of federal open market committee fomc performance over the past three years relative to the committees monetary policy goals,4
for many families the outlay for childrens education is the second  tuition data are from the national center for education statistics various years,0
certainly  the  best  known  of  the  federal  functions is that of monetary policymaking,4
moreover the market demands that our thousands of smaller banks hold substantial equity capital an amount significantly above the minimum standards,2
the remarks represent my own views which do not necessarily represent those of the federal reserve board or the federal open market committee,4
here in the united states the federal deposit insurance corporations fdics most recent survey of unbanked and underbanked households found that 7 percent of us households in 2015 were unbanked,0
it also prov ides a clear sense of direction for inter national trade policy,3
one unifying theme will run through all these topics and that is the single global market for goods and services that is rapidly taking shape,1
businesses slashed capital spending and payrolls and real gdp contracted by 47 percent more than twice the average for the 10 other recessions since world war ii,1
the standard way in which the fomc stimulates the economy is by reducing the target for the overnight federal funds rate and shaping expectations about future policy actions through the fomcs statement and other communications,4
real income has not fared as  badly but per capita salary income is nevertheless almost 2 percent below  its peak in the first quarter of 2008 a likely widening of income dispersion  over the period however suggests that median income has probably fared worse,0
it is an honor to be here today with such distinguished panelists to discuss the communications challenges associated with quantitative easing,4
the resulting delays in returning to work are bad for the economy and may cause the workers skills to atrophy,0
later in the 1950s and 1960s european banks sought to broaden their business lines to encompass the mass market as a way to expand their deposit base to fund loans,2
    allowing free markets to foster an everexpanding international division of labor will in the future as in the past be fraught with controversy even as the evidence of the success of such a paradigm mounts,0
however the legislation views deviations from the reference policy rule as being undesirable,3
its a challenge to improve the real and perceived benefits versus the costs of employment but it is doable as other countries have shown,0
and finally we have drawn down the pool of available workers,0
but i think they were counting jobs rather than making jobs count,0
in light of the difficulties and uncertainties that are associated with measuring the pace of technological change i want to take a moment to comment on the risks for the appropriate conduct of monetary policy that are associated with technology and productivity,4
they represent the best of corporate leadership in the technology industry today  the entrepreneurial spirit of a young dynamic company and the innovative drive of an industry giant with markets that span the globe,1
the development of derivatives clearinghouses and recent overthecounter innovationsâ journal of money credit and banking vol,2
in fact many banking regulations were or still are related to geography,2
as a former dean of agriculture i have heard repeatedly the cry that we are losing our best young men and especially our agriculturally trained college graduates from the farm,0
thus requiring a bank to issue tradable debt would likely increase both direct and indirect discipline,2
but when the demand for goods and services is growing slowly that may be the case,1
if the market came to believe that the united states soon would fix the price of gold and would do so in a credible manner so that no further price increase could be expected for the foreseeable future many holders would sell and the price would come down,3
we tried our best to make fiscal policy work in ways that would reduce unemployment and idle capacity keep the economy operating close to its fullemployment potential and yet avoid periods of excess demand that create fresh inflationary forcesin retrospect our principal mistake was a failure to recognize the severe limitations of aggregate demand management in an economy as complex as our we tried to achieve results that simply could not be realized2supplyside econanics in fiscal policy is a logical canplement to the way in which rronetary policy is currently being conducted,3
commitments that are contingent  on future economic conditions in contrast enjoy at least some support on the  fomc,4
economics as a discipline differs in important ways from science and engineering the latter dealing as they do with inanimate objects rather than willful human beings can often be far more precise in their predictions,4
as the temporary dollar surge made our products uncompetitive americans were quick to abandon their foreign markets instead of redoubling their efforts to enhance productivity and to offer better service,1
the tax system is now doing much more than just collecting revenues to pay for spending programs,3
as a result lenders have become investors loan spreads have become investment yields and individual loans have become the feedstock of pools of like assets brought together through a process known as securitization,2
investment productivity and real economic growth fare best in an environment of low and stable inflation,1
h ow ever slowing growth in the labor force competition for investment funds from domestic and international sources and low er consumption are likely to keep overall growth from being as strong as in the 1970s and 1980s,0
we now recognize that vulnerable underinformed consumers sometimes make decisions that dont serve them well,0
the critical question therefore often becomes how can one judge the actual breadth and intensity of community demands for various banking services as distinct from the quantity and quality of services that the existing and proposed new combinations of banks intend supplying,2
clearly it should take advantage of the cheap longterm debt by issuing bonds,2
to guide expectations concerning the process of normalizing the size and composition of the federal reserves balance sheet at its june 2011 meeting the fomc laid out what it called exit principles,4
ive been emphasizing the importance of strengthening public policy to address potential problems,3
then ill discuss some of the effects that changes in the financial environment may have had on the behavior of mortgage markets participants,2
12however from late last spring until well into the fall a farther increase in the discount rate was a matter of much debatewithin the federal reserve system as well as in the financial community generally,4
this presents some great opportunities for ambitious entrepreneurs and venture capitalists but it also underscores how difficult things are in some industries,1
in issuing these guidelines  we have not in any way attempted to arbitrarily restrict bank financing of corporate restructuring,2
in the quarter century after world war ii the expansion of secondary and postsecondary education caused labor quality growth to average nearly 1 percent per year as younger more highly educated workers replaced retirees with less educational attainment,0
this uncertainty creates the potential for instability in the banking system,2
these linkages can create business opportunities and enhance the productivity of small and mediumsized enterprises,1
if it were only understood that monetary policy is a powerful tool in the stabilization of general economic activity and the price level but is a weak and very costly tool for the stabilization of individual economic sectors and markets perhaps the bias towards interest rate control would abate,4
they assume that the target leverage of banks and others decreases as it has in previous lending cycles but they also net out reduced lending from one leveraged entity to another,2
weve seen continued solid job growth unemployment is at a historically low level and we entered 2020 with very good momentum,0
2but even more important than the temptation to rest easy with its laurels is the fact that the stresses bankinp has been through successfully are in fact only prologue to what is to come,2
and these many years later each day at work i see the importance of that passion to carrying out the feds duties effectively,4
after three years of leading the nation in job growth the region will see a leveling off of employment creation in 1995 this development is nothing to be alarmed about because the southeast should still enjoy healthy job growth this year,0
for negro banks with total deposits between 510 million officers salaries averaged 9340_ or 212 per cent less than the average of 9567 in all insured banks,2
see stephan whitaker how much help do state and local governments need,3
   almost certainly the most important economic development in the united states in the past decade has been the sustained increase in the rate of growth of labor productivity or output per hour of work,0
see group of twenty 2013 communiqué of meeting of g20 finance ministers and central bank governors february 16 paragraph 5 return to text 3 see for example board of governors of the federal reserve system 2015 federal reserve issues fomc statement press release december 16 and brainard 2015b,4
indeed i am convinced that longrun economic performance generally and monetary policy success specifically depends critically on economic literacy,4
the  fraction of the population over the age of 16 who had a job fell from over 63  percent to just over 58 percent,0
also it must be remembered that  these visitors from outside your area do not require schools or the full range of social services attendant upon the growth of permanent population,0
moreover although we often think of global competition as being associated with internationally traded goods many of the same forces that have made the global marketplace increasingly competitiveespecially faster cheaper transportation and the revolutionary changes in communications and information managementalso operate to make domestic markets broader and more competitive,1
and importantly the factors weighing on equilibrium real rates could be quite persistent meaning that low real and given our 2 percent inflation target nominal interest rates could be with us for some time  even after policy rates return to a neutral setting,4
2  that will certainly have an impact on our overall level of exports,1
the largest firms in the industry and the number of such firms remains large enough to assure vigorous competition have been maintaining their profitability compared with manufacturing as a whole,1
moreover heightened uncertainty and pressures on intermediary balance sheets have impaired the usual channels of credit intermediation,2
surprises of the current expansion when we reflect on the current expansion we see first and foremost a combination of robust economic growth low unemployment and modest inflation,0
underlying conditions suggest that this situation will persist  during the remainder of 1989  it is still possible though that some improvement in  building activities may occur now that the repercussions of several major layoffs are largely behind us,0
so when the time comes to withdraw monetary stimulus the fomc will be able to raise the interest rate on reserves or drain reserve balances or both,4
in the first place our manufacturing  sector is not nearly as bad o ff as some would have us believe and the potential for significant advances in productivity is at hand,1
one could even argue that for overall balance the united states should have lower deficits relative to gnp than do countries that have more domestic savings on which to draw,3
if we do not make steady progress in reducing the federal budget deficit the debt service burden will continue to mount,3
certain aspects of our tax structure for example have increasingly been recognized as being less conducive to savings and investment and thus to the growth of us productivity than we might like,3
because those workers have skills that dont easily shift to other industries they tend to have a harder time finding good highwage jobs in their locales,0
however it is an area to be monitored because public finance contributes broadly to financial and economic stability,3
these circumstances should help our net export position,1
but any erosion of assets that reflects bank equity ie of the auount by which assets exceed liabilities falls upon shareholders,2
the only one ever implemented was contemporaneous reserve accounting and even this step came after the fomc had deemphasized aggregates targeting,4
controls did discourage domestic oil production which fell precipitously thus increasing our reliance on oil imports,1
many people have the impression that savings funds are inherently less profitable than demand depositsa view which overall banking statistics appear to support,2
in that context and with the risk of inflation muted the fomc decided earlier this month to make a midcycle reduction in interest rates with the goal of providing a little insurance for the continued growth of the economy and strength of the labor market,4
however the fomc also cautioned that the risks continued to be weighted mainly toward conditions that may generate economic weakness rather than inflation,4
conclusion in conclusion the financial services industry has evolved considerably over the past several years in large part because of innovation in products services and activities particularly in the areas of complex structured finance transactions credit risk transfer and risk management,2
meanwhile the turmoil in financial markets this summer has heightened everyones concerns about the recoverys future course,2
credit risk market risk  my own suspicion is that in  general financial innovation has resulted in an effective redistribution of market riskthat those unwilling to take market risk have a number of options available to lay it off to those who are both willing and better qualified to take it,2
this question is of interest to both regulators and the banking industry since there is no inherent reason aiy the bank holding company movement must lead to a deterioration of strength of the american banking system,2
the greatest effects are among hispanic students the probability of majoring in economics and accounting after receiving the positive treatment is almost 17 percentage points higher for hispanic males and 48 percentage points higher for hispanic females,0
our country in other words has failed to break the link between government debt and inflationary money creation as germany and japan have done,3
wages have been moving up rapidly and some costpush undoubtedly is present,0
as the market for credit default swaps expands and deepens the collective knowledge held by market participants is exactly reflected in the prices of these derivative instruments,2
another important factor has been the very low level of policy interest rates in the united states and in most other industrialized economies,4
however i do not believe that a monetary policy aimed at improvement in the balance of payments conflicts with a monetary policy aimed at the restoration of domestic stability,4
our efforts to invest in diversifying the regions economy and providing adequate education for our labor force face an obstacle o f larger proportions howeverone that everyone in this country needs to be concerned about,0
the major areas of strength in the outlook are business spending for new plant and equipment as well as inventories,1
after all asset prices can rise and fall sometimes very rapidly and still be based on fundamentals,2
today for      some banks dayold balance sheets are on the edge of      obsolescence,2
tax exemption makes banks together with upper bracket individuals the principal holders of municipals,2
1     the percentages of people in the southeast employed in the various types    of  economic  5  activities i just outlined can be seen in this graph r5  transparency 2 employment in the southeast by sector,0
the mortgage bankers who have arranged this meeting today have done so in the true pioneering spirit of their profession of nashville and of vanderbilt and i am grateful to be a part of it,2
first we have the graying  o f the population and second the maturing o f the postwar babyboom generation,0
academic literature shows that over the longrun internationally diversified equity portfolios have a better riskreturn tradeoff than domesticonly equity portfolios,2
although higher interest rates will raise the monthly payment cost of housing for some new borrowers policy is not disconnected from factors that should improve overall affordabilityfactors like wage growth and employment prospects,0
one risk of waiting is that the committee may be forced to raise rates very quickly to prevent an increase in inflation,4
enhanced prudential standards in implementing enhanced prudential standards for foreign banks with a large us presence we sought to ensure that firms hold sufficient local capital and liquidityand have a risk management infrastructurethat is commensurate with the risks in their us operations2 and in general that approach is meeting many of the broad goals the federal reserve set out to achieve,2
it also changed drastically the source of liquidity to individual depository institutions which previously had been liquid debt instruments issued by someone else often the treasury,2
indicators of business sentiment from a variety of national and regional surveys have deteriorated on balance in recent months,1
presently  manufacturing accounts for only 7 percent of our employment though output in  manufacturing has fallen much less from 18 percent to 15 percent,1
as i said we have moved much closer to our goals since last year and accordingly the stance of monetary policy should reflect such progress and begin to adjust gradually,4
many emerging market economies also are doing well with exports providing a significant boost to activity in these countries,1
modern developments have eroded the value of the banking franchise on the asset side the liability side and the page 2  payment system,2
while reserve banks generally seem to have a somewhat larger proportion of their total employment in blue collar and service activities than do other segments of the banking industry negroes in these banks tend to be found even more frequently outside the white collar area,2
past population growth has created a need to improve education and expand infrastructure and these activities are falling largely on the shoulders of the state and local governments,3
as the share of manufacturing employment continues to decline in the united states and in mississippi driven by productivity gains and the movement of lowerskilled jobs overseas the new face of manufacturing is one of high efficiency and use of advanced technology,1
by contrast policies promoting longer working life could ameliorate some of the potential demographic stresses,0
but in those earlier years the typical trainee t1as a man already possessing some kind of ski 11 and uork experience jho t1as temporarily unemployed,0
a shift from budget surplus to deficit  is therefore entirely consistent with a decreasing rate of inflation since to get a decreasing rate of inflation requires an economic slowdown and as i have already indicated such a slowdown tends other things equal to swing the budget       5    f r o m surplus to deficit,3
add to all of that higher capital requirements for banks at yearend 1992 this one factor caused many banks actually to downsize their balance sheets to improve capital ratios,2
but you are well aware that we are also in the midst of tremendous changes in the nature of mortgage instruments and lending patterns reflecting in part the desire of lenders to protect themselves from uncertainty and volatility,2
2  hie us economy i believe we will have another good year of moderate growth with gdp expanding by about 3 percent slightly faster than in 1993 in fact the momentum of business activity in the last three months could even push this figure higher,1
its board members are drawn from industry leadershipfor exanple arthur m wood former chairman and ceo of searsfrom government and from academic accountancy the sec practice sections executive committee has membership from a wide variety of firms in the accounting profession and it utilizes a small permanent staffaccentuation of the use of inforrnation management techniques to delimit the scope of examinations and to flush out those areas of particular risk in the institution being examined,4
congress will have to make that decision,3
the broad scope of changes that i have discussed gives you some idea of the skills that will be required of our future bankers,2
we see today a worldwide trend toward greater clarity transparency and specificity in central bank communication with the public,4
canvassing individual fomc members positions is a way of predicting what policy  will be,4
at the end of 1966 multinational banks were operating with the highest loan to deposit ratios with the major regional banks next in order,2
a license would be needed whether the foreign bank applies for a national or a state charter,2
take credit derivatives as an example,2
the conference boards labor market differential  the difference between those who think jobs are plentiful versus hard to get  reached the highest reading 441 percent in july since 2000 and this confidence can be contagious,0
their involvement can support financial services broadly,2
on the part of the fed we are offering guidance to lenders with regard to the disclosure of terms and costs to borrowers and with regard to the risks of carrying such loans on their books,4
as i already noted the us economy is in a very good place with the unemployment rate near a 50year low inflationary pressures muted expected inflation stable and gdp growth solid and projected to remain so,0
the missions take with them hundreds of proposals of american businessmen to sell products establish relations with distributors or promote other profitproducing arrangements,1
these statutes moved control of policy from the district banks to the fomc giving the board more authority,4
the feds first purchase program worked to lower interest rates  1  ben bernanke rebalancing the global recovery speech at the sixth european central bank central banking conference frankfurt germany november 19 2010,4
the following year congress passed the national bank act of 1864 which established the office of the comptroller of the currency and gave the federal government the authority to supervise commercial banks,3
upward moves in ebpagain those corresponding to a widening of credit spreadsare very informative about the future evolution of the real economy,2
so the fact that we annually export so ouch of our talent and our labor is one reason for wanting to be able to provide more opportunities here at home,0
let me spend a few minutes on economic developments in the fourth federal reserve district which comprises all of ohio western pennsylvania eastern kentucky and the northern panhandle of west virginia,4
d our strength in the future will be our ability to compete on quality rather than on price,1
as a nation we have begun to grapple with the budget deficits which i believe have created a significant drag on economic growth in the past few years,3
with the strains in housing persisting a substantial slowdown in business spending could raise the odds of a recession,1
similarly the evidence that globalization has helped to restrain unit labor costs in recent years is mixed,0
the second is people working harder,0
it explores the economic consequences of an aging population distribution,0
after that we can expect inflation of a bit over 2 percent for 2022 and right at 2 percent in 2023 unemployment should fall steadily during this period as well,0
banks that  10  aggressively practice liability management should have well thought out contingency plans in any case and they should be reviewed and approved by the directors of such banks,2
such language was used to describe episodes when the fed was aggressively providing monetary accommodation to stimulate employment and the economy  the go phase  only to find itself forced to apply the brakes abruptly to prevent a rapid uptick in inflation  the stop phase,4
despite false warnings and recommendations by some that depositors should move their money to larger sophisticated banks your communities continued to give you their trust,2
the set of studies that resulted was8 published in 1972 and many other studies and proposals have been put forward since then by students of the housing industrywe at the federal reserve have long been committed to findinganswers to this pressing problem and have sought the legislation that will allow thrift institutions to adjust more quickly to the changing financial climate over the business cycleit has been our past experience that with the presentinstitutional structures a monetary policy designed to aid the thrift industry through low interest rates tends to be overly expansive and ultimately inflationary,4
prudent innovation for the united states the alternative to privately issued digital currency is not necessarily a publicly issued digital currency,4
growth in spending on hightech capital equipment and software was especially high averaging 20 percent per year or more,1
yes the job markets so tight it squeaks,0
our financial system today is far more resilient than it was before the crisis and i want to maintain that resiliency,2
in analyzing the reasons for this it is important to bear in mind that the interest rate is only one element of credit card pricing,2
because of the lag of price changes behind changes in the rate of growth of the money stock it probably would be not only months but several years before the adoption of moderate policy actions would have any lasting observable effect on the inflation rate,4
i intend to spend much of the remaining time discussing the evolving linkages between globalization and monetary policy,4
while most banks accumulate good core information on which to base internalratingsbased indicators more information will be necessary in some cases,2
the broader m2 measure of the money supply also slowed from a 125percent rate of growth in the third quarter to a 92percent growth in the final quarter of 1979 and it decelerated even further in early 1980  the fed has  delivered on its promises and it will persist with a gradual orderly diminution of growth in the months ahead,4
for the time being the most effective way to address these concerns is to ensure that our policy actions align with our commitment to achieving the existing inflation target which the committee has recently clarified is symmetric around 2 percentand not a ceilingalong with maximum employment,4
the budget deficit is way too large and may ultimately become a drag on growth,3
so i will spend a few minutes exploring the state of the job market in some detail,0
if economic policy is to play a constructive role in building a new world economy policymakers must increasingly focus on policies that eliminate barriers to communication and allow the market to work most efficiently and effectively,3
the fall in the market value of their assets can make it difficult for these institutions to meet demands from depositors or debtholders to pay off their liabilities,2
as a result congress finds itself beset by a cacophony of diverse pleas,3
public policy therefore should weigh carefully any potential adverse effects on competition in the evolution of the banking structurea discussion of concentration as a measure of competition would not be complete without saying a few words about statewide5management factor,3
federal financial policies are my speciality and they are of great importance,3
certainly our understanding of credit discrimination has already been improved by research using hmda data,2
to the younger generation it had become a way of life and to some of our older citizens a kind of betrayal of their retirement planning,0
in other words so long as the united states and the rest of the world grow at approximately the same rate these studies suggest that us exports and imports should grow at roughly equal rates,1
because the financial distress was so deep and pervasive and because it took place in financial markets whose structure had evolved dramatically our actions also needed to be innovative if they were to have a chance of being effective,2
but we should remember that theres a uniquely american wisdom expressed in the structure of the federal reserve,4
inflation costs in 2012 the fomc adopted for the first time an explicit longerrun inflation objective of 2 percent as measured by the pce price index5 other central banks including the european central bank and the bank of england also have a 2 percent inflation target,4
because the job of a central banker is to protect the purchasing power of currency it is overall inflation that we need to keep down not just core inflation,4
these innovations include new financial instruments such as cds mmcs now accounts and rising rate notes new technologies such as eft new management concepts such as liability and interest rate gap management and finally new institutional forms such as the onebank holding companyhigh market interest rates have also created economic opportunities for less regulated firms to offer financial services on more favorable terms and often at rates above regulation q ceilings which are now in the process of being phased outthe combination of these financial innovations and the entry and expansion of nondepository institutions into the financial service industry has radically affected the structure and functioning of financial markets and has significantly altered the array of financial services being providedthese developments are eroding the distinctions between banks and thrifts and have opened the door to so many different providers of financial services that it is now beginning to be difficult to tell which firms are and are not financial institutionsi am particularly concerned with the risk implications of these financial innovations which will require careful regulatory and supervisory oversight,2
the total reduction of one per cent has released to member banks reserves of about 1 billion,2
recent research conducted by the federal reserve bank of boston suggests that homeowners who have experienced a 20 percent or greater fall in house prices are about 14 times more likely to default on a mortgage compared with homeowners who have experienced a 20 percent increase in the price of their home1  some types of mortgage borrowers appear to be particularly sensitive to homeprice declines at least 18 percent of foreclosures started in the third quarter of 2007 involved nonowneroccupied properties,4
2  commit to the forward guidance on the fed funds rate path by treating the 65 percent unemployment rate and the 25 percent inflation rate as triggers rather than thresholds,4
e  corporations are borrowing longterm money at real rates that will be high unless the rate of inflation rises,1
the federal reserve should i believe permit sufficient growth in money and credit to encourage sustained recovery,4
2 however i take part in all fomc meetings ever y year as all 12 reser ve bank presidents attend all the meetings and participate in the discussions regardless of voting status,4
but if there is a tax increase there will be less  inflation than there otherwise would have been,3
overview the eleventh federal reserve district comprises texas northern louisiana and southern new mexico,4
the percentage of the black population aged 25 to 35 that has completed four years of college more than doubled between 1970 and 2000 from 65 percent to 15 percent,0
america has come a long way since the dark days of the financial crisis and small businesses deserve a considerable share of the credit for the investment and hiring that have brought that progress,1
the new element is the 50 million reporting floor which seems necessary in any reasonable test of determining whether a lender is engaged in the business of mortgage lending a direct quote from the statutory language,2
in the long run it changes the very nature of financial intermediation,2
but a most promising approach is to modify the tax system to encourage rather than to inhibit saving and investmentl__government policiesthis leads directly to the final aspect of a coordinatedprogram designed to curb inflation namely government policythere is a lot of talk these days about the wisdom and timingof any possible tax cut,3
my remarks have focused on  the federal reserves ability to stop a financial crisis from creating a great  depression,4
the saving rate measured by the boards flow of funds accounts is higher at 5 percent of disposable income though it too is significantly lower than its average level in the past,0
having a  federal reserve office contributed greatly to the industrial growth of el paso  houston and san antonio,4
the internal revenue service has published guidance on the tax treatment of digital currencies wwwirsgovpubirsdropn1421pdf,3
later this morning my colleagues from the federal reserve will be talking with you about how to manage your credit,4
while an emerging body of empirical research investigates this hypothesis in the context of credit riskdocumenting that banks tend to make riskier loans when rates are lowour focus is instead on the implications of the reachforyield mechanism on the pricing of interest rate risk also known as duration risk4           the theory we sketch involves a set of yieldoriented investors,2
commercial banks and increasingly thritts as they have gained banking powers are operators of the payments system they are custodians for the bulk ot liquid savings in the economy they are still by far the most important suppliers of credit and they are the link between monetary policy ana the economy,2
however during the first half of the 1990s inequality partially receded for consumer expenditures while for income it continued to rise table 1,0
and when i see the small business owners that i used to lend to they tell me that they could not have survived the downturn without low rates,1
although banks borrowed only moderate amounts at the discount window they substantially increased the amount of collateral they placed with reserve banks,2
the current basel i measures are not very risk sensitive and do not provide meaningful measures to bankers supervisors or the marketplace for complex banking organizations,2
racial minorities like black americans were already more likely to be unemployed than other groups  and covid19 heightened this yawning disparity,0
1 the methodology for forecasting labor force participation developed in aaronson and sullivan 2001 suggests that currently the participation rate is trending downward about 02 percentage point per year,0
the third question the review will consider is how can the fomcs communication of its policy framework and implementation be improved,4
should the central bank  deliberately try to move interest rates or should it try to let the market play the major role in the field,4
there have been more than a few dismaying examples of ceos who nearly drove their companies to the wall and presided over a significant fall in the price of the companies stock relative to that of their competitors and the stock market overall,1
the resulting trade deficit threatens to make the united states an international debtor nation,3
some bank holding companies have issued mediumterm notes tied to ehortterm rates with redemption features enhancing their liquidity,2
the financing of business agriculture and individuals has always involved pioneering and experimentation and as you are thoroughly aware over the years we have made a great deal of progress in developing new methods tailored both to the needs of the borrower and the safety and liquidity requirements of the lender,2
the banking act of 1935 in particular renamed the federal reserve board the board of governors and granted the washingtonbased entity greater powers,4
on this point i would like to say that the deliberative approach we take to monetary policy would be seriously undermined by politicizing the central bank,4
as a monetary policymaker i prefer to take a longer view rather than let our decisions be whipsawed by the most recent statistics which are often noisy and subject to revision,4
when american banks seized up in 1990 as a consequence of a collapse in the value of real estate collateral the capital markets largely unaffected by the decline in values were able to substitute for the loss of bank financial intermediation,2
the greatest need in financial markets today is discipline and you  6 7  are the people who must instill that sadly lacking quality into current  8  business activity,2
inasmuch as the u s treasury borrowed over 23 billion dollars in the fiscal year beginning in july 1967 money and capital markets were under great pressure,3
aside from its direct benefits for the safety and soundness of these large institutions such an approach also would help offset financial firms incentive to grow until they are perceived to be too big to fail,2
moreover this form of capital formation has totaled more than half the aggregate expenditures on all other types of durable goods combinedincluding such durables as business equipment consumer automobiles household furniture and appliances and durables purchased by the government for defense and other purposes3some people argue that because the social costs of delaying urban investment are high the impact of monetary policy in this area should be offset by selective countermoves through such media as fnma fhi fhlbb advances or public subsidies,4
high consumer demand has been great news for the auto industry,1
monetary policy the recent policy action to increase the target range for the fed funds rate to 112 to 134 percent is consistent with this commitment and continues the process to gradually increase interest rates as the economy has continued to make progress on our monetary policy goals,4
the hearings also likely will address issues related to predatory lending and market developments since 2002 when the board last revised its rules for higherpriced loans under the home ownership and equity protection act hoepa,2
over the same four years however blacks share of total jobs in manufacturing climbed slightly from 96 per cent to 99 per cent,0
but in the context in which i am using exchange ratesand for that matter commodity prices and yield spreadsi do not envisage them becoming targets of monetary policy,4
but as some sectors of the economy have continued to struggle permanent job loss has increased figure 9,0
nevertheless during the past fifteen years or so both the political elites and the broader public in the region have for the most part shown an increased willingness to abandon the failed economic models of earlier decades in favor of new approaches that emphasize improved fiscal discipline the benefits of free trade and free markets and the vital importance of building strong economic institutions,3
it might be faster  but the nuances  the emotional tone of the business community would be lost,1
before the crisis and for some time afterwards the clearing banks unwound all triparty repo trades each dayeven those with a significant term which in theory represented longerterm financing commitmentsreturning securities to borrowers and cash to lenders,2
fed decisionmakers will review those projections and may revise them according to their own best judgments and then will formulate  policy directions which are thought to be conducive to the most optimal outcomethereafter as our implementing operations get underway our staff will monitor developments closely to see if any significant deviations from projections begin to emerge,4
as a result the evolution of aggregate supply also exhibits a significant forwardlooking component,1
12in family income are substantially wider than the differences in median family income,0
so there are a lot of reasons to be concerned about when business spending will pick up,1
employment on district farms has declined year after year as new equipment has been substituted for labor,0
but in order to maintain their position in the financial services industry it will be necessary to unwind those factors that inhibit the ability of the depositories to compete and adapt to changing economic conditions,2
our concerns now extend beyond the capacity of individual institutions to protect their capital and balance sheets,2
minority women also lag their male peers,0
it does concern us that international financial institutions can operate in the united states on a more favorable basis than american banks,2
the ability of the fed to get at these  however by having voluntary capital requirements  formally applied to the primary dealers and then by requiring them in turn to apply the requirements to the secondary dealers the fed was able to have some impact,4
as a result of the capital inflow over the  past eight years or so the stock of productive capital in the us is significantly larger than it would have otherwise beenthis increased capital stock produces a number of macroeconomic benefits,1
labor productivity has increased only 12 percent per year on average since 2011the worst performance over such a period since world war ii figure 4,0
if we want to eliminate inflation we must reduce monetary growth to reasonable levels which are compatible with output growth,4
government debt primarily in the form of treasury obligations held by the public as a percentage of gdp has grown from 44 percent at yearend 2008 to approximately 77 percent as of dec 31 2018,3
  12   all of that notwithstanding the question at hand is whether the costs of reserves incurred by correspondent banks are such to place them at a competitive disadvantage relative to the fed in the provision of payments services to other depository institutions,2
the narrow monetary aggregate ml has accelerated to more than 10 percent rates of growth in the first two quarters of this year and has continued to grow rapidly in the current quarter,4
the experience of many decades tells us that industrial policies are far from a surefire development strategy as they require that the government be adept at picking winners,3
this is especially true in the case of ever more aggressive monetary policy accommodation,4
at the end of the third quarter of 1991 there were 1100 problem banks almost 10 percent of all commercial banks in the united states with about 500 billion of assetsbad real estate constitutes the major portion of nonperforming assets but commercial and industrial loans and some consumer loans are also included among the 96 billion of problem assetsat the same date other real estate owned through foreclosure totaled 249 billion up from 214 billion at the end of 1990net chargeoffs for the first three quarters of 1991 were running at an annual rate of 31 billion vs 29 billion for all of 1990obviously these trends are real trouble for the banks if they are not reversed,2
this is perhaps the single most important discipline for monetary policy under an interest rate regime,4
because we do not save enough to fund   4   our own investment and government deficits we have had to rely on the savings of our friends abroad,3
the federal reserve emphasis has been that it can be good profitable business when done the right way and the incentive ought to be profitable opportunity rather than avoidance of costly penalties,4
people with limited means are more likely to have difficulty providing their children with a highquality early childhood environment leaving those children less able to benefit from later investments in human capital,0
i know many of you here today are from community banks,2
5  the growth o f interestbearing transactions accounts like now and moneymarket accounts in the mideighties however m lwhich had been the most important o f these targetsstopped behaving in the way it previously had and lost much o f its value as a barometer,2
that is one reason i believe the congress has not wanted to delegate its power over money directly to those responsible for financing the governmento but i suspect that many in congress have also wanted a degree of insulation for the federal reserve from shortterm political or electoral pressures that can arise in the congress itself,3
on the other hand the acceleration of corporate tax payments a key component of new fiscal policy measures generated considerable money market pressures around the tax periods of march april and june,3
such a low level of applications suggests that potential borrowers were wary of entering the housing market or feared being turned down for a loan,0
our   homeowners are thus less burdened with their housing predicament and better   positioned as consumers,0
in short through this approach the demand of some for paper checks will carry less weight in the business decisions of the many,1
on the supply side the production of oil has been constrained by available capacity hurricanes and geopolitical developments,1
it can be further  argued that the result is in fact a federal subsidy to banks,2
many banks now operate free of the fear of new entry into their markets and this threat of potential new entry may provide greater incentive for good performanceto be realistic even if the law were changed tomorrow few places other than major urban areas would experience outofstate entry in the immediate future,2
in the 1980s governments ran large budget deficits and public debt relative to gdp soared,3
that was about couble the amount of increase in outstanding longterm debt of all federal stte and local governments and private corporations combined,3
the it revolution has not simply allowed a worker to turn the crank faster on an improved machine the traditional way we think of technological innovation but opened the possibility of fundamentally altering the way production or provision of a service takes place,0
stress testing has evolved and must continue to evolve to take on what we as supervisors learn from our work and what we can learn from others,2
all told my forecast of the economy is generally consistent with the median projections made by my colleagues on the fomc which were released last month4 what about monetary policy,4
3  forces and trends t h at w ill a ffect the future  the labor force will grow more slowly demographic trends will affect the economy regardless of government policies,0
over the years legislation enacted by the          various states and ultimately at the federal level eliminated the barriers          to banks operating across state lines at least with respect to interstate          bank acquisitions,2
one is hard pressed to argue that there  is much efficacy derived from additional expansion of the feds balance sheet,4
policy implications in setting policy the federal reserve needs to be mindful of the risks to the outlook for both growth and inflation,4
the first shift was heightened concern about the material wellbeing of working men and women,0
the speedup in collection of social security contributions withheld income taxes and excise taxes in the first quarter drew off an estimated 650 million in business working capital and the continued acceleration of the corporate income tax payments schedule added an estimated 43 billion to business tax remittances in april and,3
8 incidentally since the board has assigned me the responsibility for administering the voluntary program on foreign credits of banks and other financial institutions let me take a moment to report on its most recent accomplishment,2
in this way changes in excess reserves directly affect the available supply of credit,2
money is also used more intensively in small budget accounts where minimum or average balance requirements are relaxed and transactions paid for on a fee basis2alfred marshall connnented after quoting these words this terse statement carries far,2
looking ahead there is little prospect that the earnings position of commercial banks will be strengthened significantlyif at allby significant increases in their demand balances,2
because of this catchup factor capitalgoods spending will probably continue high even if some easing of sales occurs at the retail level,1
the question therefore is not whether the central bank has a responsibility to insure the safety and efficiency of the payment mechanism but rather it is one of how that responsibility can be most effectively dis charged,4
there is a strong positive link between banking and financial market development and economic growth and a number of studies have concluded that banking and financial market development is a key driver of economic growth,2
the potential for a dealers exit to adversely affect mortgage hedgers is dependent upon hedgers diversification of counterparties the way in which hedgers use options and the underlying reason for such an exit,2
at the center of the federal reserve system is the board of governors,4
thus the level of the stock market can affect households demand for cars tvs vacation travel and all the other things people spend their income on,0
here i think is the principal explanation of why the busts in dotcom stock prices and in the housing and mortgage markets had such markedly different effects,2
other tax incentives for exports common to all the countries discussed here exporters are permitted drawback of customs duties on material used in exports,3
blue collar workers histor ically have been more vulnerable to displacement than other workers,0
these institutions understand that complex operations require a more          structured and welldefined riskmanagement framework to monitor the effectiveness          of internal control processes and risk exposures,2
unfortunately because it takes some time for workers to find new jobs a certain level of unemployment is unavoidable,0
those of you in financial firms are affected through your credit exposure to firms that followed questionable accounting practices and through your own corporate governance practices,2
if the bank is successful the profits belong to the stockholders and the depositors money is safe,2
some might call for restrictions to banks participation in buyouts since a large proportion o f the financing originates from banks,2
savings and loan associations mutual  savings banks and commercial banks all are subject to the same corporate income tax law,2
it is important to recognize that by being more explicit about its objectives and more transparent and systematic about its decisionmaking framework the central bank enhances its credibility,4
nominal interest rates however cannot fall below zero and this fact can pose a problem for monetary policy,4
in addition declining farm populations in some communities in the great plains strained social institutions such as schools county services and hospitals that tend to require a critical mass of population to operate effectively,0
the district banks and brunches comprise an immense network of economic intelligence through which the system is kept informed as to the changing problems and conditions in business and within the commercial banks themselves,2
fundamentally whats important is the feds ability to deliver on our mandated policy goals of full employment and price stability,4
finally you as businessmen can play an important role in further enhancing the attractiveness of the city as a place in which to live and do business,1
foreclosed vacant and abandoned properties threaten neighborhoods nationwide and community leaders are working to stabilize those neighborhoods,0
for instance delinquencies are up in the us market for subprime home loans,0
this means keeping the federal funds rate at its current setting continuing our 133 programs until we judge that they are no longer required and considering use of other tools,4
moreover since september 1966 the federal reserve system has had authority from congress to buy and sell in the open market all federal agency issues including those offered by fnma and fhlbanks which are direct obligations of or fully guaranteed as to principal and interest by the agency,4
in summary i believe the steps taken since the financial crisis have made the financial system more resilient,2
it is important to recognize that the influence of changes in the fomcs targeted funds rate on inflation and economic growth occurs with a lag so by necessity the fomc must be forwardlooking in setting an appropriate funds rate target,4
in that regard consumer spending has been soft but seems for the moment at least not unduly so,0
fortunately as i indicated a moment ago i believe we will see increasing growth in employment as the year progresses,0
clearly articulating objectives lets consider these four principles beginning with clearly articulating the objectives of monetary policy,4
women have entered the us labor force in record numbers and have increasingly risen to positions of authority,0
in a few cases these unexpected increases in the balance sheet created some pressures on capital ratios even if the level of capital remained stable,2
economic theory suggests at least two reasons why the factors embedded in sovereign yield curves may be correlated across countries,3
reflecting these developments is a continued rise in corporate profits which has allowed firms to further bolster their strong balance sheet positions,1
major overseas markets are becoming more open although the degree of openness varies from market to market,1
that is understanding how a systemic resolution mechanism could maintain reduce or reverse incentives to engage in what might otherwise be socially desirable cooperation could affect the optimal design of that mechanism and other elements of financial regulation,2
for those with some college education the rise was from 36 per cent to 44 per cent,0
the feds policy is based on a simple premise  the inflation process cannot persist very long w ithout monetary accom m odation,4
these earnings will be needed for investing not only in modern equipment but also in human resources,1
international trade barriers are as unreasonable under competitive production and marketing conditions as are trade barriers between states cities or counties,1
as the expansion gains traction the challenge will be to reduce accommodation and normalize policy in a way that ensures that inflation remains close to our target that the economy continues to grow and that we avoid sowing the seeds of another financial crisis,4
thinking runs along the lines of allocation of current account deficits with the intention of making the debt burden most readily bearable,3
the proportion of farm employment  attributable to the production of products exported was as high as 18 percent in north dakota and 24 percent in montana,1
i feel that pcess inventory accumulation in anticipation of inventory profits magnifies the amplitude of the normal recession cycle,1
however the region is not a major capital goods producer and so the expected strength in capital spending by businesses on equipment will be less of an advantage,1
gains in educational attainment and experience in the labor force have plateaued,0
a policy focusing on the monetary aggregates must be constrained of course by concern about interest rates,4
large u s banks currently hold a record 86 billion   4   banking is indeed quite different than it was fifteen years ago,2
the third weapon of credit and monetary policy and in a sense the most basic of all is that of open market operations,4
risk assessments such as the one outlined in coso presumably could also be useful in assessing various lines of business when formulating business strategies,1
by 1970 public administration represented 55 per cent of total employment but the proportion for blacks had risen to 66 per cent,0
admittedly the ability of budget analysts to forecast the trajectory of healthcare spending is limited but it is prudent to assume that federal health spending per beneficiary will continue to rise faster than per capita gdp for the foreseeable future,3
that means kids coming out of school who can read and write and reason and can handle the technology of modern jobs,0
the us debt figures cited here refer to gross federal  debt which includes virtually all debt issued by the us government,3
the term structural unemployment is used to refer to unemployment caused by longterm changes in the economy such as the decline of certain industries or changing technology and is thought to be less likely to be affected by monetary policy2 unfortunately for policymakers the distinction between cyclical and structural unemployment is not always clear  and sometimes a cyclical downturn can be caused by structural shifts,0
i have to think rather that this public concern about the banks reflects a deeper general concern about the economy,2
reductions in employment have occurred among all classes of workersblue collar white collar and profesional workers alike,0
measures of credit stress such as reductions in nonperforming assets delinquencies and chargeoff rates show steady improvement in credit quality,2
the weak dollar and the longawaited european recovery should boost domestic sales which in turn should lead to more investment by businesses,1
as a share of the workforce that number is very high historically,0
they actively pursue arbitrage opportunities across markets and in the process often reduce or eliminate mispricing of financial assets,2
the squeeze came from both the liability side in the form of more attractive savings vehicles such as money market funds and from the asset side with the growth of public capital markets and international competition,2
this means a rise from less than 4 percent of total banking assets to about 14 percent over these eight years,2
where job losses occurred while the unemployment pain in this recession has been broad based certain sectors have been hit particularly hard,0
the pronounced tightening of us financial conditions during the euroarea sovereign debt crisis that occurred from 2011 to 2012 illustrated the strength of these financial ties,2
even so the  necessary investment wont be forthcoming without an inflationfree environment of greater certainty for business planning,1
1  demand for workers remains strong but available supplies are becoming limited,0
there are no easy solutions to the problem of how to ensure that our public pension system remains sound in the face of inevitable demographic changes,0
at the recommendation of the administration the congress subsequently passed a bill that among other things created a new and stronger regulator for the gses the federal housing finance agency fhfa and provided the treasury with powers to purchase gse debt and equity,3
the ease flexibility and low perceived cost of shortterm funding also supported a broader trend toward higher leverage and greater maturity mismatch in individual shadow banking institutions and in the sector as a whole,2
given that the fomc acts as the market forecasts the fomcs actions are not themselves information and therefore elicit no adjustment of market prices,4
for example the proposed basel ii capital framework will be a major change in the regulation of bank capital,2
according to these studies the trend growth of money stock over several years determines the rate of inflation,2
unfortunately the science of monetary policy has not progressed to the point where we can specify the optimal rule for setting monetary policy,4
the challenge for the federal open market committee is to adjust monetary policy so the economy can maintain price stability at the same time it moves toward a sustainable growth path,4
those productivity increases affect the inflation outlook in two related ways first by raising potential output and thus for given growth in aggregate demand the size of the output gap and second by reducing the costs of production which puts downward pressure on prices,1
indeed consumers themselves appear to be reevaluating the riskiness associated with indebtedness no doubt reflecting a sense that their income and asset returns may be substantially riskier than they had come to believe during the great moderation,0
the way the banking system is developing it seems to me inevitable that many nonmembers are going to have access to federal reserve services,2
part of the problem lies with the 150percent oilprice shock of the 197980 period which acted as a giant    sales tax raising prices and draining off purchasing power that otherwise would have been available for buying other goods and services,1
at the same time banks that had acquired large amounts of interestbearing deposits at rising market rates were under pressure to make effective use of those funds to cover their increased costs,2
if so the first clear signs of inflation pressure could come later than usual in the progression toward maximum employment,0
one sign of this behavior would be consumption inequality rising much less than income inequality,0
there also is a problem in com paring unemployment rates over time because the set of tradeoffs between inflation and unemployment may change significantly,0
but by promoting sound practices supervision supports financial stability and allows financial market participants to be more confident of their counterparties abilities to execute transactions,2
some of this discrepancy is due to the disproportionate representation of women in lowerpaying occupations such as childcare work cleaning and social services,0
but at the same time i feel we may be too constrained by the heavy layer of ancient traditions and conventional wisdom that encrusts both academic and central banker views,4
in the comparable period of 1969 these banks experienced a net drain of almost 19 billion in total deposits,2
the general trend toward less goverrnnelt involvement in   8 the economy,3
third even if appropriate data become available it may be quite difficult to isolate costs for particular banking activities given the number of products and activities offered by even moderately complex financial institutions,2
conclusion experiences studied over a range of countries and periods of history tell us that central banks need a degree of insulation from shortterm political pressures if they are to consistently foster the achievement of their mediumterm macroeconomic objectives of price stability and high employment,4
at some point in the nottoodistant future we are likely to face an economy growing in a selfsustaining way while the unemployment rate is still relatively high by historical standards,0
so i thought i would wrap up my remarks with research that shows that a college degree will improve your chances of getting a job and enhance your earnings potential throughout your career,0
we can see this by comparing recent employment growth in atlanta with the rest of georgia,0
in  fact the same philosophy that decreed that the least government was the best government also held that planning was not just useless and unnecessary it was absolutely destructive because it infringed on the freedom of the individual and his rights to property both of which were sacrosanct,3
the governmentarranged and subsidized absorption of bear stearns into jpmorgan chase draws attention to two additional features of the toobigtofail problem,3
the benefit of tight labor markets is also in the signals they send to individuals and businesses that people should be employed as productively as possible and that investment in training pays off,0
stablecoin networks at global scale are leading us to revisit questions over what form money can take who or what can issue it and how payments can be recorded and settled,3
but when the banking industry went to the extreme in meeting these demands it was again subject to criticism,2
when examining the evolution of commercial bank longerterm lending practices developments in the field of consumer instalment credit give most pause for thought,2
to  sum up ive suggested that the fomc clarify that its inflation target is  symmetric and that the committee typically seeks to achieve that target within  a twoyear horizon,4
too often discussions of wage and compensation determination rely on descriptions of worker demands and expectations that seem drawn from an era of strong unions rather than from the more atomistic labor markets that dominate the us economy these days,0
money both cash and deposit money would be an essential element in the painful struggle for survivalat first thought it would seem that money would be redundant in these circumstances and that our main problem would be to soak up large amounts of excess cash and deposits which would be competing for the limited supply of available goods and services,2
9the natural forces of the marketplace would tend to increase the demand for monetary gold stocks,2
these firms also generate nearly half of the sales revenues of all us firms,1
as you well know the  current proposal embodied in senate bill 2898 introduced on january 28 by  senators sparkman and tower reflects  the criticisms we have received on previous proposals in that it embodies significant changes from prior proposals,3
federal reserve notes were redeemable in gold on demand and the fed was required to maintain a gold reserve equal to 40 percent of outstanding notes,4
although some of this activity involves issues related to affordable housing and community development over the past few years our community affairs activities have increasingly focused on small business and economic development,1
at the federal level changes in the level and structure of taxation and special remedial programs in the key problem areas are clearly indicated,3
3 the impact of the crisis on the conduct of monetary policyin particular how to balance the goals of achieving stable inflation and full employment while also taking into account the need to maintain financial stability,4
in fact inflation has been the driving force behind much of the structural change observed in banking and finance over recent years,2
moreover business fixed investment is likely to get a boost from the fact that the real price of hightech goods is likely to continue to decline somewhat so that the hurdle rate for hightech goods is likely to continue to decline,1
but uncontrolled costs whether governmental or private are job killers,0
drawing on the lessons from the crisis the g20 leaders endorsed a package of reforms to tackle these two problems for systemically important banks,2
brazil is the fourth largest holder of us treasury securities with more than 200 billion in treasuries as of june 2012 after china japan and the major oil exporters as a group,3
in this section of the paper i should like to turn to a second and less desirable dimension of financial stability  namely the local market stability that can result from a less than vigorously competitive group of sellers of financial servicesthat kind of market stability with sticky prices little service innovation and tacitly uncontested market shares epitomizes much of what economists count on competition to dispel,2
there is considerable evidence that countries that have adopted such an objective as a cornerstone of their monetary policy decisionmaking have had more success at achieving price stability without any deterioration in the stability of real activity,4
a substantial rebound in business spending had been a hallmark of most past economic expansions,1
the decisions to be made are numerous and some are complicated with the complications arising sometimes because the intent of the congress is unclear and in other cases because the choices may have significant implications,3
however in the face of a relatively low savings rate and huge federal borrowing interest rates would stay high and  crowd out private borrowing,3
a nation cannot     11  inflate its way to prosperity,4
merger proposals that would make a relatively large bank still more dominant in its market area reduce the number of effective competitors for the business of various classes of bank customers without substantial offsetting public benefits or widen the gap between the competitive abilities of one or two major institutions and the remaining body of smaller banks these are the kinds of proposals that are a clear challenge to the preservation of competition,2
total value of farm assets rose from 1316 billion in 1950 to 2979 billion in 1969 some of the increase was the result of inflation but the greater portion represents rising capitilization primarily additional laborsaving machinery,1
the board must also find that the complementary activity poses no substantial risk to the safety and soundness of depository institutions or the financial system generally,2
i hope that i have convinced you  that these interventions would have been significantly more difficult if not  actually impossible in a world in which the federal reserve did not have a  supervisory role,4
greater slack amplifies the downward pressure on inflation although the quantitative effect is probably fairly modest given the flat slope of the phillips curve,0
some large correspondent  banks are wondering whether the correspondent business is really very profitable some smaller banks are wondering whether larger balances they are asked to carry are really worthwhile,2
in the past growth in output was generally translated into growth in domestic consumption but that is not true now because of the debt service burden,0
as an aside i might note that this has been possible without a policy which some have characterized as one of very rapid monetary expansion,4
and they themselves faced a 3 billion current account eficit,3
as a result nearly 7 trillion in housing wealth has been lost,0
opec was able to boost production relatively quickly in response to changing market conditions by utilizing productive capacity that had been idle,1
moreover an environment of rising stock prices is ordinarily one in which companies can more 4  readily raise funds in the market which supports higher business capital spending,1
i would like to thank fannie mae neighborhood reinvestment nhsa and the local neighborworks organizations for their commitment to addressing the issues of affordable housing,0
the goal is job creation and economic development in a rural area rather than the inner city,0
but at the time the federal reserve was the only government entity with authority to act and the tremendous risks to the financial system and the real economy implied by the failure of a large complex interconnected firm made the option of not acting unthinkable,4
in several previous guideline revisions efforts had been made to modify the distribution of ceilings prevailing at the time the vfcr was promulgated in early 1965 essentially foreign lending patterns had been frozen as they were at the end of 1964 this action gave a preferred position to those banks that had established  6 themselves early in the field of foreign lending,2
1 these remarks represent my own views which do not necessarily represent those of the federal reserve board or the federal open market committee,4
these more successful firms developed inhouse expertise to conduct independent valuations and refrained from relying solely on thirdparty assessments which again underscores the need for firms to trust but verify,2
financial rnrkets were singled out for especially comprehensive regulation in part because of the perceived role of the stock rrarket crash and successive waves of bank failures in worsening the economic turrooil,2
in addition our involvement in supervision is critical for ensuring that we have the necessary expertise information and authorities to carry out our essential functions of promoting financial stability and making monetary policy,2
the federal open market coumittee which is composed of the seven members of the federal reserve board and five of the presidents of the federal reserve banks would be abolished and all of its powers would be transferred to the enlarged board of governors,4
while the fed has lent for extended periods in some cases in the past it seems reasonable to presume that in most instances the lending period would not be long enough for all bonds to mature,4
and we could see a decline to onetwentieth of a percentage point by 2010 as the highly experienced workers of the baby boom generation retire in increasing numbers,0
for each size of bank the net rate of return on consumer instalment loans is clearly higher than that on connnercial and other business loans,2
with college enrollment rates having leveled off in recent years much debate surrounds how we can move more students into higher education and keep them in school until they graduate,0
progress on achieving fair and equitable treatment of small depositors will take time but the many innovations in thrift assets and liabilities will ultimately permit fairer returns to small savers as well as reduce thrift vulnerability to interest rate risk,0
a significant share of these loans went to low and moderate income areas or groups,0
2  firms would face lower costs of funds and hence lower hurdle rates for approving new investments,1
so resolving financial sector weaknesses means both restructuring and recapitalizing banks and orderly workouts of the debt problems of their corporate sectors,2
this lack of congressional momentum could          be interpreted as lack of congressional support for inflation targeting          or it could merely reflect a more neutral absence of strong opinions,3
in addition the fed has long been involved in promoting financial literacy efforts for borrowers,4
the latest official forecast for fiscal 1976 is 60  billion but there is growing uncertainty whether congress will go along with the presidents proposals for spending holddowns and whether it     6  will add on new recessionrelated expenditures to push the deficit to 69 billion or even more,3
to replace the bopec bank holding company rating system which has served the federal reserve system well for twentyfive years a proposal has been issued for comment to move to a new rating system that encompasses ratings for risk management financial strength and the impact of nondepository legal entities on affiliated depository institutions a composite rating and a depository institution rating,2
the stock market soared andremarkably enoughcore inflation moderated,2
many of those manufacturers such as the domestic automakers and steel producers are based here in the midwest,1
but in addition purchases of agency mbs reduce the spread between treasury and mbs yields and thus compared with purchases of treasury securities have somewhat larger effects on mortgage rates,4
first it allows me to tell people about the federal reserve and its role as the central bank of the united states,4
because the reallocation of productive factors is found to occur both within and across industries this process creates aggregate productivity gains,1
heail  they reduced their herds rather than accumulate excessive debt for when drought began to impinge on their reserves too feed  in this way they avoided unnecessary damage to their ranges and  8 conserved their assets so as to be in position to restock as conditions improved,1
for example during the harsh recession of the early 1980s unemployment in ohio peaked near 14 percent which was 3 percentage points above the national rate and it remained high for several years,0
if banking supervision and rgulation is on the wrong road we need to find out where wl,2
charters are being sought from both state and federal supervisors and the movement is receiving strong support from large banks and other corporations as well as from many public officials,3
how can we gain better assurance of systemic stability when we are unlikely to be able to continuously extend the reach of regulation and will it be sufficient to deepen the moats around the core institutions,2
i will discuss these statements in a minute but before turning to them i want to give you some background on the creation of the financial stability forum its composition and its purpose,2
consequently it is desirable they may think to move discount rates and reserve requirements down when that can be done without reviving latent sparks of inflation in order to improve the effective position of monetary policy,2
the federal reserve is in a more complex position within the government relative to the central banks of many other countries and this position both complicates any consultative process and elevates its importance,4
the forecast indicates the income employment and inflation that are expected to be consistent with a particular policy and assumptions about exogenous factors,0
this experience acquired at considerable cost is now standing the nation in good steadmarket oriented tax devices against inflationwhen i was still a professor and columnist and perhaps unduly inclined to flirt novel ideas i designed two approaches to the control of inflation via the tax system that appeared in various learned journals as well as in newsweek magazine,3
there have been as you kna very few bank failures since the 1930 s few nvolved any substartial losses to depositors,2
i commend all the students here for taking an interest in consumer issues early on in life,0
and the growing threat of volatility here and abroad led to new developments to measure and limit trading risk,2
in that sense the exercise has some continuity with the microprudential approach â the percentage of required capital needs to be increased to achieve a smaller probability of failure based on the kind of loss history examined for basel iii purposes,2
return to text  14 for these reasons i supported preserving capital at large banks,2
federal reserve examiners will continue to look at four key components of riskmanagement systems in evaluating the management of supervised institutions,4
although us exports have grown rapidly the united states is not the worlds largest goods exporter,1
but we should recognize some important responses that have emerged from regulators and markets flatter risk functions have been adopted in the basel ii proposal banks maintain buffer capital stocks basel ii requires that under pillar 2 supervisors and banks discuss the size of the necessary buffer capital that each bank should carry for cyclical purposes and the proposed rules require stresstesting of risk parameters,2
our new framework for establishing capital requirements was calibrated based on the assumption that we would set these requirements using a full stress test based on published scenarios,2
we maintained that rapid expansion in the first quarter of 2006 but over the last six months job creation has averaged 118000 jobs per month,0
unless the entry of women and minorities into graduate school picks up it is hard to see how the numbers of phds in the ranks of academia and in nonacademic positions that require a phd in economics can increase,0
gnp rose by 16 billion in the fourth quarter almost as much as in the first quarter of the year when the effects of the automobile and steel strikes shifted output from the past and the future into a temporary surge,1
the economic outlook and the conduct of monetary policy speech delivered at the stanford institute for economic policy research stanford university stanford calif january 19,4
perhaps as we have just indicated with the september 2020 forward guidance the fomc back in 2016 could have waited until inflation actually got to 2 percent before beginning to remove accommodation rather than tightening on a forecast,4
study of    6  other economists work and our own investigative efforts proved conclusively that the money stock can be controlled with a relatively high degree of accuracy,4
the difficulty here is that the fed should not adjust policy simply because the market expects it,4
moreover there is little evidence that higher oil prices have spread in a substantial way elsewhere in the economy and into an ongoing increase in inflation as was the case in the 1970s,1
it is  argued that such changes would make the fed more responsive to the political process,4
  9    separately wagepush pressures have aggravated the problem of inflation throughout the past decade,0
a review of the 1981 reagan budget plan  reveals that federal spending was projected at 918 billion for 1986  the actual figure came in at 990 billion or an error of over 70  billion,3
as practiced it emphasizes forecasts but within a more rulelike structure that skews monetary policy toward inflation containment as the primary goal,4
however to the extent that financial markets extrapolate price movements markets may not transition smoothly to asset valuations that reflect underlying fundamentals but may instead evidence periods of overshooting18 such forces may have played a role in both the stock market boom that ended in the bust of 2001 and the house price bubble that burst in 200709 the risks of such financial imbalances may be greater in the context of the kind of explicit inflation target overshooting policies proposed in the paper,2
some people i talk to say that budget deficits dont count,3
today a large number are in the tourist and resort business the automobile business or in many different service trades,1
second one can argue that by reducing term premiums lsaps in particular have potentially significant benefits in terms of financial stability,2
the monthly job numbers dont fully reflect the huge amount of churning that actually takes place in labor markets,0
as growth in sales moderated some stores and factories were caught with excessive inventories particularly in the auto industry,1
through this  facility at the end of 2008 the federal reserve had 450 billion dollars of  loans outstanding to depository institutions,4
theyll involve retraining and in many cases relocating,0
slow growth abroad especially in europe and china and uncertainty over trade policy and tariffs have weakened demand for us exports which has weighed on the us manufacturing and agricultural sectors,1
over the past decade for example the share of households that own homes has risen from 64 percent to 69 percent,0
since  196 bank loans have increased by 377 per cent while deposits rose by 72 percent,2
these banks have long played a unique and important role in our banking system by providing access to credit and financial services in markets that have historically been underserved,2
second the amount of employee movement across jobs has fallen over time,0
similarly over the same period the gap in median earnings between those completing high school and those with less than a highschool education increased from 19 percent to 42 percent,0
to help us better understand what is going on in the banks we supervise and in the communities they serve we continue to seek many views,2
in conclusion we may sav that commercial banks can do andmany are doingan admirable job of meeting the total credit needs of farmers on an enlightened and realistic basis so far as terms and amounts are concerned,2
that of course has to be the aim of monetary policy and public policy generally,4
this surge in the availability of more timely information has enabled business management to remove large swaths of inventory safety stocks and worker redundancies,1
cooperation in monetary policy is offcen urged as a means of achieving a coordinated change usually downward in interest rates,4
striking and preserving the right balance between the safety net regulation and market discipline is vital to ensuring that financial markets make positive contributions to the resiliency and growth of our economy over the long run,3
we left to europe the specialized markets for high quality goods,1
diversification gains may also result from consolidation across financial products and services although research suggests that the potential benefits may be fairly limited,2
globally the introduction of new capital and liquidity regulations has increased the resilience of the banking system,2
the real economic costs in terms of lost output and employment are still unknown,0
see joint forum 2015 for examples of enhancements to credit risk practices that have been made by firms since the crisis,2
the number of very wealthy investors and the amount of free investment funds available in fully taxed investment institutions have failed to keep pace with the mounting supplies of taxexempt securities,2
still others believe workers have reassessed their perspectives on work versus time at home,0
such pressures unfortunately exposed numerous and substantial flaws in some of these financial systems including lax lending policies substantial mismatches in the maturities and foreign exchange denominations of assets and liabilities seriously deficient standards for disclosure of basic private financial information hedges based on erroneous  presumptions about the correlations among returns the failure to monitor ongoing loan performance and the inadequacy of reserves against potential losses,2
the present system also provides too little incentive for capital investment during periods of high inflation and financial uncertainty liberalized depreciation allowances should certainly be given prime consideration when a tax reduction is appropriate,1
the growing importance of assets that provide a return from services as well as from loaned funds is also evident in the acquisition of serviceoriented subsidiaries by bank holding companies,2
in addition to the drying up of large portions of mortgage finance that i referred to previously conditions have firmed on loans for a variety of other purposes,2
estimates vary but somewhere between 70000 and 100000 a month is what many believe is appropriate to keep up with population growth,0
namely it is difficult for some central bankers to tolerate abovetarget inflation even for limited and controlled periods of time,4
the predictive nature of the statistically based models mitigates risk and promotes safety and soundness,2
securities analysts and investors will need to consider not only the health of each bank but also the health of the banking system as a whole and the prospects for regulators to intervene,2
the burden of taxes therefore has increased and in the case of inventory profits at least cash low has been less than it appeared to be,3
monetary policy will continue to play a constructive role in promoting sustainable recovery characterized by stable prices a long period of good returns on investments high employment and economic growth,4
through a small business loan local entrepreneurs in camden can provide for their families while increasing jobs for local residents,0
today i want to talk to you about  some basics about the fomc my outlook for the economy and the implications of  my outlook for monetary policy,4
since these two subjects are directly related to our dual banking systema system which both the national association of supervisors of state banks and the american bankers association feel must be preservedi would like to use the next few minutes to discuss them,2
to dwell on a point most all the  businesses i talk to are expanding investment in productivity enhancement,1
bottlenecks develop in certain sectors as they expand and prices in those sectors begin to rise,1
the latter applied to the trading derivatives and private equity positions of the six firms with the highest volumes of trading included a dramatic widening of credit default spreads for both european sovereigns and financial institutions as well as sharp increases in spreads for european sovereign bonds,2
if  banks  not be sufficient to withstand a run even  liquified at the discount window,2
over the past 50 years we have been challenged by growing competition from japan the asian tigers mexico and now china and india,1
to be sure although it has yet to show any real signs of vigor business fixed investment has at least seemed to stabilize,1
the treasury international capital or tic data  released yesterday morning show that foreign interest in buying treasuries  remains robust,3
together these trends indicate a danger that our pool of highly educated individuals in the workforce will not be sufficient in the future,0
by hindering the application of better compensation systems and labor management relations inflation denies us of the benefits of more flexible wages for stabilizing economic growth in the short run and of improvements in productivity in the long run,0
and quite simply it is suggesting that right now we are very close to our 2 percent price stability mandate,4
school enrollment rates among traditional collegeage young people which were little changed in the 1970s have moved up sharply since then,0
we need to do everything we can to ensure that our policies are appropriate given these many changes,4
then the macroeconomic impact of the  feds highly accommodative stance over the next couple of months would be  negligible,4
but the pro portion of demand deposits held by non member banks has increased to the point where the effectiveness of monetary policy is being affected,4
the fed evaluated current data about aggregate demand employ  ment and prices to determine if the economy was operating satisfactorily,0
our mission is to preserve price stability to foster maximum sustainable growth in output and employment and to promote a stable and efficient financial system,4
the shift of customers from bank credit to the capital markets was a particularly profound challenge because as i noted since the early 1930s the glasssteagall act had prohibited banks from affiliating with companies that engaged principally in underwriting securities except for government securities,2
the ongoing growth in employment and real incomes and the recent increase in the stock market wealth of households should also support the demand for housing,0
whatever the working  arrangement however certain qualities in the attorney are fundamental,0
however displaced workers are the job losers that deserve particular attention,0
at that time the committee indicated that no increase in the federal funds rate target should be anticipated so long as unemployment remained above 612 percent and inflation was projected to be no more than 212 percent onetotwo years ahead,0
viewed at this perspective it  would seem that to the extent the argument is valid it would be so only insofar as it pertains to the reserves held by correspondent banks on due to deposits,2
while the employment rolls are gradually improving to date weve only added back 13 million jobs,0
research from economists at the federal reserve bank of new york shows that the decline in leverage among other factors has substantially reduced potential fire sale externalities in the banking and brokerdealer sectors14 thus the regulatory changes appear to be having a positive effect on financial system stability and these benefits may outweigh the potential costs of a possible reduction in liquidity,2
the other unconventional tool is known as forward guidanceproviding information about the future path of shortterm interest rates anticipated by the committee,4
it is equally true however that market participants must also act responsibly so as to prevent the distortion of an innovative and truly freemarket creation,2
as the pool of available workers is depleted the possibility increases for higher wage increases than can be justified by productiv ity growth which in tur n might lead to higher inflation down the road,0
thus these estimated gaps could easily point monetary policy in the wrong direction at the time decisions have to be made,4
and there is reason to believe that many americans are limited where math proficiency is concerned,0
paul  volcker told me recently that in his day he knew that a bank was headed for  trouble when it grew too fast moved into a fancy new building placed the  chairman of the board as the head of the art committee and hired mckinsey   co to do an incentive compensation study for the senior officers,2
still we were certainly not without guidance from wellestablished principles when we formulated policies to address the financial crisis,4
neither relative price movements nor sustained high living costs constitute inflation as economists commonly use the term,0
serving all those consumers are 1528 commercial banks 1785 credit unions and 237 savings and loans  thats one sixth of the national total of financial institutions,2
if the services now provided by the federal reserve were produced in whole or in large part by private financial institutions our nation might be confronted with quasimonopoly pricing in some markets inadequate services in others or the development over time of unsafe payments practices,4
however keen the logic the upshot would be a highly discriminatory burden on ci1e nearly 6000 out of nearly 14000 banks that choose through membership in the federal reserve system to assist the making of economic policy for the nation by being subject to federal reserve reserve requirements,2
some mortgage lenders however suggested that the pattern or practice provision did not provide a safe harbor that would ensure compliance and that their procedures for compliance would by necessity be equally robust under either version of the rule,2
a highlyrated guarantor for example could offer effective protection against the default of a small number of instruments,2
in addition to the changes occurring in financial markets i believe that we will witness a recovery in 1983 that is substantially different from others in the postwar experience,2
with your deep knowledge of your customers your commitment to your community and your backtobasics approach to banking you can position yourselves to be that partner,2
12 the growth of money slowed in the first few months of this year despite the marked acceleration of federal reserve credit and the monetary base,4
protecting the fed as a political nuisance   i mentioned at the onset that i think  it imperative that the fed be wary of giving rise to concerns that we will be  politically pliant,4
i do believe however that lenderoflast resort policies should take a lesson from what we have learned from the theory of monetary policy,4
in a word we must maintain a prudent but not  parsimonious monetary policy,4
second i see little evidence for example in the job flows data to suggest that the pace of structural change today is greater than it was after the 199091 recession or in the expansion of the mid to late1990s,0
2 one participant in our study pointed out that the us may be facing a shortage of trained workers in technical trades,0
for the system as a whole adjustment time represents the weighted averages of days involved in the process using as weights the numberof federal reserve banks posting a change on a given day,4
inflation cuts into the supply of saving available for housing in still another way,0
many weeks like the last one of funding 15 billion for treasury may in time bring upward pressure on interest ratés,3
to sum up bankings nearterm outlook briefly it would be fair to say that banking is going under a microscope,2
as i mentioned earlier one of the reasons that the price discovery mechanism has broken down in some us markets in recent months is that a number of investors failed to exercise due diligence and relied on rating agency assessments,2
now the covid19 pandemic is raising a new set of housing challenges for renters and the rental market,0
figure 1 describes the timing of intrastate branching deregulation across the states,2
the point of  the story however and the point of my entire discussion is simply that reform of the nations deposit insurance program is likely to have considerably greater consequences than have been generally recognized,2
the vast majority of mortgages including even subprime mortgages continue to perform well,2
not knowing the  outcome is arguably the worst of all worlds2 this  view is by no means unique to bankers,2
at the same time we may see new kinds of institutions specializing in credit evaluation and loan origination as well as others that make their money from packaging and selling loans,2
recent work by nicoletta batini tim callen and warwick mckibbin 2006 also provides a global view of the impacts of the unfolding demographic transition,0
we have already seen some progress in risk measurement and management at many institutions in the united states and around the globe as a result of preparations for basel ii,2
when asked during the july 1996 fomc meeting what level of inflation does not cause distortions to economic decisionmaking chairman greenspan responded zero if inflation is properly measured4 greenspans view that the theoretically correct definition of price stability is zero inflation stems from his belief that economic growth is maximized when the price level is unchanged on average over time5 while i believe that there is a virtual consensus that the economy functions best when the theoretically correct measure of inflation is low not everyone agrees with greenspan that true price stabilitya zero rate of inflation properly measuredis the best target for the fed,4
real business  investment increased only onethird as fast and worker productivity less than half as fast as in the preceding decade,1
thus while the pressure on profits is unmistakable it does not appear to justify a general rush to restore margins through successive rounds of price increases,1
this increase appears to be fairly widespread across the population of community banks and it is evident at highly profitable and lessprofitable institutions,2
the last nine months of 1966 marked a period of effective restrictive action to combat inflation,4
indeed until the most recent employment report many commentators had described this period as the jobless recovery,0
nevertheless by enhancing certainty about what can be done and how it can be done i believe that the financial modernization law will likely bring an increase in mergers among firms that had been specializing in different financial services,2
adjusting for the verizon strike over the past three months firms added an average of 127000 jobs per month,0
coincident with this decline in stock values both long and shortterm interest rates fell substantially,2
294  michael moskow speeches  2000  customers would then flock to the protected bank causing his funding sources to become more expensive or disappear,2
in essence a bigger capital cushion will serve as a reform of deposit insurance because it should obviate the need for it,2
second increased job insecurity appears to have moderated the pace of wage change relative to what we would have expected at current levels of labor force utilization,0
3   the related growth in salaries in this higher wage sector should  help bolster consumer spending,0
residential construction will again be a solid     3 contributor to growth in the us economy as will capital investments by businesses especially on computers and industrial equipment,1
accounting disclosure and market discipline  strong risk measurement and disciplined maintenance of data also improve the communication between the institution and its investors and counterparties,2
for monetary policy the growth of contingent work affects the way we assess maximum employment and the way we interpret important labor market outcomes such as the level of parttime employment and aggregate hours worked,0
finally the federal reserve needs to place greater reliance on recent initiatives that promote a more riskfocused supervision process and market disciplinetwo trends that the federal reserve has actively pursued in recent years,4
this could occur if for example continued uncertainty over the international trade situation generated adverse business sentiment and reduced spending or alternatively if the firming of inflation expectations stalls out before they are clearly centered around our 2 percent inflation target,1
second because the federal reserve conducts stress tests simultaneously on the major institutions it supervises the results can be used both for comparative analyses across firms and to judge the collective susceptibility of major financial institutions to certain types of shocks,4
such institutions establish and maintain strong property rights an effective legal system and a sound and efficient financial system,2
but in the end we believe that a rigorous qualification process will create a more risksensitive regulatory capital regime and improve risk management,2
our taxing and spending policies shift resources  4from the private sector which has been the strength of the american economy to the public sector whose past accomplishments provide little reason to expect efficiency and productivity,3
return to text 11 privatesector stablecoins are also subject to cyber risk of course but any individual private stablecoin network would be less systemic than a cbdc for an entire advanced economy and private companies are frequently better able to make the rapid and constant investment in technology required to keep current with technological security threats,3
my view is that without explicit constraints on the size of the balance sheet the fed runs the risk of being pressured to use its balance sheet to engage in policies whose goals have nothing to do with monetary policy,4
the credit boom began to unravel in early 2007 when problems surfaced with subprime mortgagesmortgages offered to lesscreditworthy borrowersand house prices in parts of the country began to fall,2
in the final portion of my remarks i want to talk about  httpwwwclevelandfedorgfor_the_publicnews_and_mediaspeeches2005pianalto_20050419cfm4292014 21326 pm  expectations communications and monetary policy  april 19 2005  federal reserve bank of cleveland  what some regard as the next frontier increasing transparency about the fomcs inflation objective,4
that wages went up fa ste r than p ro d u ctiv ity another was the devaluation o f the d o lla r ,0
uncertainty can also make firms less confident about hiring and pricing,1
and as a member of the board i am committed to following both the letter and the spirit of the law,4
although this increase  looks modest in the chart it is equivalent to about 14 million jobs beyond  what is required to match population growth and is tied for the largest decembertodecember  increase in 17 years,0
in part this deposit growth reflected lower opportunity costs of holding monetary assets as declines in market rates outpaced those on core deposits,2
all of this points to a prolonged period of cautious lending and a high cost of capital relative to benchmark interest rates like the federal funds rate even as market functioning improves,2
real spending on equipment and software rose about 4 percent over the past 12 months according to the most recent gdp report a modest gain for this category of spending,1
are businesses finding it relatively easy to hire the workers they need,1
madison has succeeded by combining a high quality of life with a concentration of innovative fir ms that prov ides the right jobs and job networking opportunities,0
although shortterm funding markets remain strained they have improved somewhat since march reflecting the availability of several fed lending facilities as well as the ongoing efforts of financial firms to repair their balance sheets and increase their liquidity,2
with respect to the babyboomers absorption of these men and women into  the labor force is virtually complete,0
that fact in turn suggests that we must begin to work toward changes that will enhance our competitiveness worldwide,3
1  also with the daimlerchrysler merger last year the auto sector is now arguably the most important industry of shared interest for germany and the united states,1
market commentary often indicates frustration that the fomc does not lay out a clearer path for policy arguing that the fomc is unpredictable,4
this gain was larger than that recorded during the full year 1973 virtually all of the increase represented credit extended to foreign borrowers since only a small fraction was accounted for by the banks investment in facilities abroad,2
as institutions continue to offer new products and services they face the challenge of incorporating the associated risks into their existing riskmanagement framework,2
as a policymaker i feel acutely the tension between the need to promote growth and guard against the specter of higher prices,4
what should not change are the objectives of monetary policy in their broadest sense at the present time especially the need to bring down inflation,4
to the extent that these reported implicit subsidies lowered mortgage loan profitability 79 percent of the institutions said that the subsidies were funded internally,2
business contacts report difficulties finding qualified workers and increased costs associated with inputs tariffs and transportation along with somewhat greater ability to pass through those increases to consumer prices,1
2  alan greenspan has told congress that the mission of the fomc is to ensure maximum sustainable growth by pursuing and ultimately achieving a stable price level,4
however based on data from the 1960 census of housing savings associations play a far more significant role in financing home ownership by negroes than do other financial institutions,0
it also contributes to additional uncertainty regarding the future course of monetary policy,4
the federal reserve bank of cleveland is perceived as a firm consistent and thorough examiner,4
while they desire to shift the maximum degree of decisionmaking to workers they must acknowledge that basic plandesign choices will affect the longterm retirement security of their employees,0
i am not aware of any evidence that the banking industry as a whole is inappropriately impeding the availability of credit  and that seems to be confirmed by recent small business surveys,1
the severity of the government debt problem may be overstated in some respects95 percent of the outstanding debt is domestically held for example and 59 percent is held by public institutions so that the japanese people truly owe the debt to themselvesbut that the governments annual deficit is now about 8 percent of gdp is nevertheless a serious concern,3
except for feed grains and rice total crop       7    output is better than last year and a combination o f reduced acreage higher yields and stable or higher prices is expected to improve net farm revenues substantially,1
i would say that onestop shopping for financial services does not have its advantages but there are disadvantages as well,2
the unveiling of merrill lynchs cash management account in 1978 was a signal event,2
or the bigger the bank the more unmanageable it becomes,2
that section of the statement also suggests that the committee might conduct further asset purchases and deploy other tools if improvement in the labor market is slow to materialize,4
in four years the number of negro students at these institutions has more than doubled,0
as we are all too aware in the most extreme cases complex structured   finance transactions appear to have been used in fraudulent schemes to   misrepresent the financial condition of public companies or evade taxes,1
by real terms i mean that the borrower has to give up a surprising amount of goods and services to be able to afford the repayments,0
whatever the causes of the boom the result was what turned out to be a glut of housing which as peoples beliefs about demand growth adjusted led to historic declines in prices,0
as always my comments are my personal views and may not reflect those of my colleagues in the federal reserve system or on the federal open market committee fomc,4
revolving credit has dropped every month since that time and is currently about 15 percent lower than it was at the time of the lehman brothers holdings bankruptcy,2
but today what i mean is managing expectations about the role monetary policy can play in promoting a healthy economy,4
savings flows to thrift institutions have sharply dilninished and stock prices have plun1meted,2
for example blacks have died of covid19 at 14 times the rate of whites and we see gaps in vaccinations too,0
he asked isnt it possible that consumer purchasing power will be exhausted in this boom period and leave very little to fall back on in less favorable times,0
to be sure in theoretical models there is a scenario by which budget deficits can create trade deficits and one by which trade deficits can create budget deficits,3
the presidents are selected by their local boards of directors and approved by the board of governors,4
the answers to these questions help guide my thinking about how to simultaneously address the feds responsibilities for monetary policy and financial stability,4
to the students here i would suggest that your ethical challenges will only become tougher as you move into the workforce and gain more responsibilities,0
illinois passed charter school legislation in 1996 but the tough political env ironment caused this legislation to be weak,3
but the policy effects are strongest when not only lenders but borrowers have confidence that shortterm interest rates will stay low,4
other savings institutions also raised their rates and in the ensuing vigorous competition for funds they continued to experience growing savings inflows,2
part may be utterly transitional as balances are shifted say from all savers certificates to the stock market,2
we nurture this progressive credit climate by striving to maintain low          inflation which makes it easier for entrepreneurs to bear the longterm          risks associated with creating new enterprises,1
as a result of both the fiscal and monetary policy contributions the nominal rate on fixedrate mortgages has as i noted earlier moved to near the lowest level over the past 30 years,0
in some communities of course this may be unavoidable if a town has lost a major employer and has no new industry or plan to replace the jobs lost,0
3  my second recommended action is to clarify the federal reserves umbrella supervision role for financial holding companies,4
consequently labor markets have been exceptionally weak for the last two years,0
even if they were not so insulated the relatively high rates which credit unions can pay on their shares still give them a marked competitive advantage over other forms of depositary saving,2
when interest rates were  extremely low it was obvious that the direction for rates was upward toward  more normal levels and our forward guidance reinforced that point,4
the balance sheet of the federal reserve has more than tripled since the financial crisis in 2008 its widely viewed that the size of the balance sheet is far beyond normal and will have to be scaled back as monetary policy is normalized,4
these capital adjustments coupled with new capital inputs have greatly increased the industrys demand for outside funds,1
the dashed line shows the optimal nominal rate if policymakers and the private sector assumed there would be no future shocks to the path for the real rate,4
this  mixed picture is mirrored in the employment data,0
first  and the millions of  people who develop the savings habit to reach specific goals or obtain specific items will continue to save when that first objective is reached,0
in addition we will see more moderate growth in household income in the year ahead due to a weaker labor market,0
these tools are forward guidance about the future level of the federal funds rate which is the interest rate charged on overnight loans between banks and largescale asset purchase programs asset purchases or lsaps,4
the worlds fastest growing age group is comprised of persons 80 years and older,0
suggest and highlight sensible actions by small businesses,1
both the basel committee on banking supervision and the us bank regulatory agencies have recently issued guidelines for strengthening liquidity risk management at financial institutions,2
in  december most of the 19 fomc participants believed that the unemployment rate  will converge to a level between 52 percent and 6 percent within five to six  years,0
the recent worsening of inflation has gone hand in hand with an upsurge in unit labor costs because of sharp gains in labor compensation and actual declines in the productivity of the nations workforce,0
this is clearly the case when activity moves from a regulated to an unregulated institution,2
moreover consolidation has produced important benefits for the banking industry as many banks have become more diversified less risky and more efficient,2
hog producers who usually benefit from falling feed costs instead have suffered big losses this past year not so much from troubles on the export side as from sharply increased production hog prices fell about twothirds over the course of 1998 but that decline at least has been partially retraced in recent weeks,1
in lafayette employment in the energy sector has increased providing a big boost to the local economy,0
that pressure could serve to put the central banks independence and its credibility at risk,4
with the rapid growth in demand for goods and services for military purposes unmatched by higher taxes to pay for the war the federal government became a principal source of inflation in the united states,3
in recent weeks i have heard a lot of concern about energy prices increasing costs for raw materials and prospects for weaker consumer spending and confidence,0
on balance i expect a small increase in inflation in 1998  the upward pressure on inflation will also depend on what happens to utilization rates over the year which in turn will depend on precisely how much growth slows,1
like the housing industry these firms  are largely dependent on financial intermediaries for credit,1
economic inclusion is not a zerosum proposition this provides a nice segue for me to talk about racial equity,0
6  it is important to note however that regulation cant prevent individual banks from failingwe have no intention o f removing one o f the ultimate sanctions o f the marketplace,2
ch adequate capital let me now take you through the various issues on the regulatory agenda and show how they relate to capital and diversification as the two pillars of bank safety,2
on a base of around 135 million this suggests monthly increases of approximately 100000 for nonfar m payroll employment,0
part of this pullback was motivated by skittish households cancellation rates according to some large builders reached 40 percent or more during the latter part of 2006 although the majority of forecasters correctly anticipated softness in housing construction the magnitude of the decline exceeded their expectations,1
the rise in interest rates this yeara rise which has taken most rates to 40year record levelsis an additional indicator of restraint although the extent of the interest rate rise was in large part influenced by the continuing expansion of credit demands mainly by businesseswith the supply of lendable funds below the large demands the increases in interest rates rationed available credit among potential borrowers,1
this is why the fomcs current  forward guidance contains what i see as strong protection against undue  inflation,4
congress wanted to ensure that the nations central bank keeps in touch with economic issues at the grassroots level across the united states,3
the rise in speculative activity does create  employment to be sure but not employment that lasts,0
a majority 8 out of 10 cite economies of scale as a factor in making an acquisition offer,1
as we approach the twentyfirst century both banks and nonbanks will need to continually reassess whether their risk management practices have kept pace with their own evolving activities and with changes in financial market dynamics and readjust accordingly,2
the federal reserve with all of the powerful tools at its disposal cant fully succeed unless native people and others that have existed on the margins of the economy have the opportunity to become full participants,4
the unemployment rate held near 4 percent although it has since increased slightly,0
that said the intended purpose of federal reserve lending is to provide liquidity to sound institutions,4
it follows that while socalled tighter monetary policy may  immediately produce higher interest rates the same result occurs with looser  monetary poficy in the longer time span,4
if the loss is to be wiped out by bringing the unemployment rate for nonwhites approximately in line with that of the total labor force it is also obvious that far greater effort must be devoted to raising the formal educational level of nonwhites as zell as to the provision of greater vocational skills and a more rapid eradication of racial discrimination,0
growth of branches in the bahamas and cayman islands while the growth of us commercial bank branches in london is clearly a major event in international banking the most remarkable develooments have occurred on this side of the atlantic,2
in my time this morning id like to take a close look at the connection between small businesses and job creation the second of the two claims,0
the subcommittee also meets with federal reserve staff to hear about ongoing research in the community banking area,4
in contrast changes in the structural determinants of unemployment are thought to be reflected in shifts of the beveridge curve to the left or right,0
agricultural area such as this that lenders adjust their allocations of credit in such a way as to assure the availability of credit to meet th9 legitirnat e needs of farmers,2
and i would also emphasize that banks should keep in mind the special problems of smaller customers who have limited financing alternatives,2
although employment roared back during the war the memory of the great depression was quite fresh and considerable uncertainty attended the economic outlook,0
the federal reserve svstem has three principal instruments for inffacing bank reserve positions,4
at such ample reserve levels small changes in the supply of reserves have little effect on the fed funds rate and the fomc began implementing monetary policy in a new way,4
from either perspective it is important that  community bankers continue to protect the value of their franchise by avoiding key missteps we have seen in the past,2
the much improved profitability can help finance expansion directly out of internal funds or indirectly by supporting firms borrowing capacity,1
a v e r a g e return on farm capital s p e c i f i e d types off commercial farms b y size per cent 12  per cent 12 11 10  esslsiallost g,1
other reform measuressuch as regulating derivatives markets and money market fundsare thus also important to pursue,2
in my opinion golernmental agencies have a duty to sqervise and regulate banks their expansion and activities not only trom the view ot what is good tor the banks but also what is good tor the natimal econaay,2
we already have 150 employees in our examination department at the richmond fed,4
when it comes to disincentivizing egregious bad behavior however the government can play a more direct role,3
with that let me turn to the other area of concern the ongoing escalation of residential housing prices,0
our bank represents the ninth of the 12 federal  reserve districts and by area were the second largest,4
however a rough guess at this time would place the strikeadjusted export surplus in the first quarter at an annual rate of slightly more than 12 billion somewhat better than the rate in the last half of 1968 imports the major factor in the worsened trade performance last year was the exceptionally large yeartoyear increase in the value of imports,1
but the attached jobgrowth data from dallas fed senior economist pia orrenius show that over the past decade texas has led the nation in job creation in all four income quartiles,0
in this way the  statement provides explicit communication about the fomcs future plans for  shortterm rates and so also shapes the level of current longerterm interest  rates,4
the management problem is not necessarily solved when you find a wellrun company that you can bring into your bank holding company,2
the lessening of capital market congestion and pressure on interest rates,2
just as any other incomes policy this one is not likely to reduce inflation,0
punishment systems provide the complement of negative incentives to the positive incentives created by compensation and promotion practices even where qualified by clawback or similar provisions,2
in short the feds regional system allows it to get a better feel for the latest economic developments and helps it focus on policy not politics,4
it represents a truly collaborative effort intended to provide         black students with opportunities to explore career pathways in economics and related professions,0
one possibility is that interest rates may have fallen in large measure because of weak aggregate demand for domestically produced goods and services due to the unprecedented growth of imports relative to exports in this country,1
public sector borrowing in the 1970s absorbed some of the funds previously invested in domestic industry,3
some context the mediumrun outlook and monetary policy let me start with some context,4
  no doubt early part of the 21st century overhaul way we deliver primary and secondary education   unsustainable habit of ending    failure not an option keep experimenting until we find a successful formula    as certain as the collapse of the soviet union the tumbling of berlin wall and the reunification of germany,0
moreover banks with check credit plans have been falling behind relatively yearbyyear,2
thus they reason when interest rates rise it is necessary to supply additional money in order to maintain current levels of spending while at the same time satisfying peoples desires to fill the cookie jar,4
an occasional failure eliminates the inefficient    14  and is a signal to other firms to exercise caution,1
mortgage servicing standards particularly for delinquent loans are more stringent than in the past due to settlement actions and consent orders,2
in my judgment the negotiable cd still is and will remain a viable money market instrument provided that interest rate ceilings are kept realistic in terms of competitive market yields,2
ilowever because of our concerns about increases in concentration we felt that unrestricted interstate branching and bank holding company eiansion is not appropriate at w7is time,2
but for sustained economic development investment in peoplein their knowledge and skillsis even more important,0
this secondary objective both in the original basel discussions and in the federal reserves framework is less central,2
dollar appreciation depressed dollar prices of agricultural commodities which in turn depressed farm incomes and the value of agricultural land,1
they appear to be content to post strong profits generated by unprecedented costcutting rather than growing their topline revenues by expanding capital investments and hiring,1
on top o f t h is  i t is becoming harder and harder  to secure q u a lifie d and e f f i c i e n t la b or,0
several economic arguments suggest that an increasing current account deficit can be bad,3
another significant aspect of the presidents new policies announced august 15 are the measures taken to reverse the deteriorating u s balance of payments,3
consequently like a number of other major central banks around the world the fomc has been deploying unconventional policy tools to promote the economic recovery,4
if so then there would be an argument for public policy to explicitly encourage or even mandate ccps for all markets,3
across the region im hearing that the investment spending taking place these days is motivated more by a desire to cut unit costs than to grow revenues,1
through its supervision and regulation function the fed fosters a safe and sound banking system in a variety of ways,2
the tradeoff is between the variability of inflation around its target zero or some low rate and the variability of output around its target the fullemployment level of output or potential output,4
it was technological innovation that allowed computer prices to fall so ver y rapidly and which has facilitated the rapid spread of computers throughout our offices stores and factories as part of the capital deepening process,1
inflation or rather the control of inflation is a primary objective of the federal reserve,4
for release at 12 noon eastern standard time thursday may 24 1962some implications of current economic developmentsremarks of george w mitchell member board of governors of the federal reserve systemat theannual convention of the indiana bankers association french lick indianamay 24 1962for release at 12 noon eastern standard time thursday may 24 1962 some implications of current economic developments remarks of george w mitchell member board of governors of the federal reserve system at the annual convention of the indiana bankers association french lick indiana may 24 1962  some implications of current economic developmentscurrent statistical reports on the business situation are restoring confidence that the economic upturn which began in march 1961 still has a way to go,4
this will mark the third year since we enhanced the disclosures to provide significantly more information about the stress testing models relative to earlier years,2
moreover a large portion of new job opportunities arises from the creation of new businesses rather than the expansion of large fortune500type companies,1
such episodes may partially explain the weakness in business capital investment,1
dividend policy the payment of excessive or unearned dividends by organizations whose capital position needs strengthening is another practice that we wish to discourage and stand ready to prohibit in extreme situations,2
highly leveraged institutions such as banks are by their nature periodically subject to seizing up as difficulties in funding leverage inevitably arise,2
so small banks should retain their niche in relationship lendingalthough that niche may be smaller than it is today,2
return to text   15 if a mortgagebacked security is collateralized by qualified residential mortgages as defined by federal regulators consistent with section 941 of the doddfrank act the securitizer is not required to retain any risk in the securitization transaction,2
these approaches dont always rely on sovereign currency or a countrys central bank to settle payments or on traditional bank accounts to transact payments,2
the recent moratorium imposed  on the further creation of nonbank banks is one example of such action,2
it is difficult to judge how much these events and the associated financial volatility have affected economic activity thus far but there seems little doubt that they have hurt household and business confidence and that they pose ongoing risks to growth,2
too much liquidity means that spending may rise to the point that aggregate demand strains the productive capacity of the economy increasing the costs of production,1
we want growth in output and we want more than anything to see a type of growth that permits us to expand our capital plant and at the same time to consume currently some of the fruits of our improvements,1
state member and nonmember insured banks total of capital and surplus as of december 31 1968 was 9 billion compared to total deposits of 176 billion,2
it is true that banks and other  firms     offering  financial  services  are  themselves  in  a  rapidly  changing    environment,2
to be sure banks2 risk appetites can change as they decide to increase or decrease the riskiness of their loan portfolios,2
in a situation requiring economy of resource use it is for the  benefit of the economy as a whole to have resources go to more rather than to less efficient users,1
given that the rate of inflation over the longer run is determined solely by monetary policy central banks can and indeed must determine the longrun level of inflation,4
as indicated earlier debt exposure with the narrow margin of profit  and the inability of the farmers own and unpaid family  labor to absorb the losses on modern highcapacity farms attention must be focused on the reliability of  credit analysis,1
i agonized over newloan and loanworkout decisions affecting the small businesses that had been my customers for more than a decade,1
clear communications also make monetary policy more effective,4
monetary policys task becomes easier if velocities turnover of deposits and other liquid assets are more stable,4
the adoption of this explicit 2 percent target means that the american  public need guess no longer about the federal reserves inflation  intentionseither on the upside or on the downside 2 percent is our goal,4
federally related transactions below this threshold amount do not have to be documented with an appraisal prepared by a licensed or certified appraiser but must be supported by an appropriate evaluation of the real estate collateral prepared in conformance with the supervisory guidance,2
randal k quarles early observations on improving the effectiveness of postcrisis regulation speech at the american bar association banking law committee annual meeting washington dc january 19 2018,2
examples include a breakdown of credit exposures by internal credit grade the allowance estimates broken down by key components morethorough discussions of why allowance components have changed from period to period and enhanced discussions of the rationale behind changes in the moresubjective allowance estimates including unallocated amounts,2
actually of course the fact that central banking is more art than science hardly makes it unique in the fields of economic political or social policy,4
the evidence also says however that prices are closely tied to costs the principal of them usually being wages,0
in this hemisphere canada should grow about 3 percent in 1989 high capacity utilization is likely to mean that business investment will provide a major push to the canadian economy,1
if we do i am confident we can achieve results good for the country and good for banking13 confidence in financial institutions in return for federal insurance of deposits,2
some of these practices in the labor area for example  date back to the depression days of the 30s others such as the call for import restrictions have become more of a problem only recently,0
d why has consumer spending growth been so rapid,0
at the start of last year the message i was gettingfrom business leaders economic data and the marketswas one of overwhelming positivity,1
whether the aim of such mutual endeavor is to stimulate a flagging economy by making additional supplies   10 of credit available or to restrain the expansion of credit under conditions when the overuse of credit threatens economic stability the member banks and the federal reserve system are allied in the common cause of the public interestlet me say in conclusion that this alliance of the member banks in a common cause with the federal reserve system epitomizes the meaning of membership in the federal reserve system10 of credit available or to restrain the expansion of credit under conditions when the overuse of credit threatens economic stability the member banks and the federal reserve system are allied in the common cause of the public interest,2
as a result the unemployment rate actually increased and averaged 74 percent during the year,0
even if we knew what the money supply was could we really control it very accurately,4
in fact such a procedure could identify customers in temporary financial duress who might be candidates for loan products in which case the bank could retain good longterm customers and appropriately structure the loan to reflect the risk and the customers could obtain the needed credit at an allin cost below what they would incur by using their checking accounts inappropriately,2
in addition we have been taking steps to improve our communication with community bankers,4
an increasing amount of domestic spending has gone to buy foreign products,1
when policy is constrained by the effective  lower bound the downward shift in inflation expectations raises the real  interest rate further diminishing the degree of monetary stimulus making the  downturn worse and reducing inflation even more,4
this would of course include bank securities,2
any decision to move in this direction therefore might be best linked to a broader decision to change the federal reserve act to allow the federal reserve to hold private debt in its portfolio,4
these areas have a larger pool of highly skilled workers to generate and share new ideas and to find new ways of doing business,0
the government sector has been reducing spending and employment,3
nonetheless export growth should continue to boost ongoing gains in the  manufacturing sector,1
as bankers you have a big job to do in meeting the credit needs of so hu ge and important an industry and that job is made even bigger and more complex because of the changes so informatively portrayed by dr wood that have b een taking place in the amount and kind of financing required by american agr lculture,2
the statement has helped articulate and clarify the federal reserves approach to monetary policy and we have agreed that any changes we might make to our strategy would likely call for some modification of this consensus statement,4
nevertheless  improvement can be made and we do need to raise our productivity and the quality o f our products so as to compete more effe c tiv e ly in world markets,1
that process ran its course and around the year 2000 participation began a gradual decline because of population aging and the continuation of other longterm trends particularly the decline in participation among prime age males,0
i have talked at some length about the growing need for more adequate farm credit,1
the funds themselves are often not leveraged in which case nearly all the liabilities are shares of the fund held by investors the price of which varies to reflect the value of the assets purchased by the manager of the fund6          while some commentators have suggested that liquidity challenges and consequent fire sale type behavior might develop if the structure of the fund places a premium on exiting first these kinds of risks would support an argument less for capital buffers than for some form of prudential market regulation such as rules on liquidity or redemptions,2
to put the magnitude of this fiscal response in perspective the 56 trillion in federal relief spending during this crisis is roughly seven times the size of the 2009 american recovery and reinvestment act,3
research shows employers are less willing to hire the longterm unemployed and often prefer other job candidates with less or even no relevant experience3           that is what dorine poole learned after she lost her job processing medical insurance claims just as the recession was getting started,0
among the strong points for the us economy in the year ahead the service sector which represents half of all personal consumption expenditures will certainly be    5  respectable,0
perhaps the recent mortgage cycle will be remembered as just another failed episode of financial innovation,2
return to text   15 for the fomcs calendarbased forward guidance as communicated in its august 2011 statement see board of governors of the federal reserve system 2011 fomc statement press release august 9 for the description of the fomcs maturity extension program that appeared in its september 2011 statement see board of governors of the federal reserve system 2011 federal reserve issues fomc statement press release september 21 return to text   16 there are a range of estimates on the effectiveness of these policies,4
in effect we strive to construct a spectrum of forecasts from which at least conceptually specific policy action is determined through the tradeoffs implied by a lossfunction,4
at the same time the difficulties of achieving suitably broad and coherent new legislation from a congress beset by competing demands is well known,3
they fear that households have become overextended and will need to rein in their spending to keep their debt burdens under control,0
to be sure our system of riskfocused supervision of banking organizations relies heavily on cooperation among multiple state and federal supervisors and it is not perfect,2
despite this negative position the pbgc does not face an immediate liquidity crisis because of the relatively long duration of its liabilities and its steady stream of premium income from active plans,0
although some contacts point to uncertainties raised by regulatory actions and government policies to explain their reluctance to invest most admit that they would increase spending if stronger demand conditions prevailed,3
financial innovations make it easier for citizens to move their assets out of the local currency should their government resort to an inflation tax,3
the federal reser ve remains committed to maintaining its focus on price stability as the best way to foster sustained healthy growth and a higher standard of liv ing for ever yone in our nation,4
if i have been  somewhat critical of others for dragging their feet on easing their fiscal policies i must emphasize that we have too been far too slow in correcting the intemperate fiscal policy that has contributed in no small measure to our current problems,3
because of the disappointing may employment report and brexit lockhart was comfortable with the fomcs june decision to keep policy on hold,0
but the bottom line is that we dont have enough people and pulling talent in from outside the united states is one way to solve the problem,0
12i hope that thi s preference for solid and sustainable progress will guide our govcrmnental housing policies,3
it remains a mostly minority community where the median income is 55000 a year,0
nonbank financial intermediation remains at the top of the fsbs priority list because of the urgency to address vulnerabilities,2
    the economic outlook and challenges facing monetary policy  recent economic performance has been hailed on wall street as paradise found and the best of times,2
specifically i wanted to know the nature and magnitude of the financing problem which the utilities will face over the next few yearsand not simply its longerrun dimensions,1
i also remain open to consideration of other alternatives which could help the fed run an ample reserves regime with a sensitivity to limiting growth in the size of the federal reserve balance sheet,4
overall business investment should continue at a respectable pace but not at the high levels of 98,1
they donât benefit if the bankâs stock price rises when undue risktaking pays off,2
economic theoryspecifically the neutrality of moneyindicates the limits to any influence of monetary policy on the level and growth rate of real gdp in the long run other than through achieving longrun price stability,4
the types of developments that might similarly reduce bank market share in small business lending are proceeding rather slowly at present but may accelerate in the future,1
this approach to capital regulation with its marketdiscipline component signals that sound accounting and disclosure will continue to be important parts of our supervisory approach for many years to come,2
in the absence of such predictability central bank responses to events will often take the market by surprise analysts will think that central bank policy is random idiosyncratic unpredictable mysterious and any of a variety of other adjectives that might be applied,4
housing market conditions        six years after house prices first began to fall we are still dealing with the aftermath of the housing bubble,0
so as the recovery begins to build up some steam  as businesses struggle to close budget deficits and fill office and industrial space and restore profitability over the short term  i hope well stay focused on two issues that will have a much bigger impact on the vitality of the region in the long term,1
the real economy is performing well and we essentially have met our employment mandate,0
this shared understanding of the importance of sound audit and control practices led to an unprecedented level of cooperation among the international regulatory communityin this case iosco the basel committee the iais the european commission ec the world bank and the financial stability forum which came to be known as the monitoring group,2
conversely a federal reserve cbdc could pose significant and concrete risks,3
third the deregulation of markets in the united states accompanied by a reduction in the real minimum wage has dramatically improved the competitive position of the united states in a more competitive world economy,0
the recent slowdown views about the role of government credit in promoting financial and macroeconomic stability tend to be shaped by views about the role of credit in the business cycle,3
uses of funds black banks as indicated above most black banks have been able to expand their lending in the black coimlunity,0
the management of default and recovery risks presents nothing fundamentally new to investors,2
at that time i commented on the tendency of some directors who are too busy to come to the bank during an examination to blame examiners for failing to discover shortages,2
as  the body began to break down in 2007 and 2008 the federal reserve undertook  several major efforts to provide wellsecured mostly shortterm credit to a  dysfunctional financial system,2
at sears one of arthurs senior executives formalized this process by requiring his direct reports to provide him with 3 pieces of bad news whenever they meet,1
however the upturn in manufacturing that the rest o f the country has been experiencing may largely bypass mississippi since so much o f its factory output is in the lowwage sector where developing countries have a decided advantage,1
it is regrettable that these new money transfer powers do not call for the provision of the cash reserve requirements that would help in achieving effective monetary control but that is a topic for another speech on another day,2
to be clear scenario analysis is distinct from our traditional regulatory stress tests at banks,2
new  zealand  has wisely  adopted  budgetary reforms to reduce its deficit and thereby lessen the likelihood  that  its central bank will be called upon to  finance government expenditures,3
c rural areas i increased manufacturing employment,0
in particular they emphasize that risks to financial stability are best addressed by focusing our attention on the large institutions at the core of the financial system,2
again these developments are consistent with a policy of restraint,4
as the iconic  bernard baruch said so well if economists knew so much they would have all  the money and we would have none1 even with the advantages we at the  federal reserve have with our access to data and battalions of brilliant  economists on our staffs that model and analyze it we are not prescient,4
postponement of new construction therefore need not materially cut back current utilization of services,1
what is needed according to these observers is a  forced draft to fan the flame of business whether in the form of larger government deficits or in the form of the creation of a significantly easier money situation,3
it was clear that additional action was called for and president johnsons program announced on february 10 1965 was the answer to the challenge,3
poor  performance in the real economy translated into bank assetquality problems a sharp increase in the number of bank failures and a reduction in credit availability in depressed regions and for depressed industries,2
i personally see no need to cast aside any of the traditional tools ie the discount rate open market operations and reserve requirements,2
this low interest rate  is intended to stimulate consumption by households and investment by firms,1
i believe there are several factors impeding a more rapid recovery in labor market conditions right now,0
our community affairs and public information offices have recently embarked on a national initiative to highlight the importance of financial literacy and heighten the visibility of economic education programs,0
third there have been substantial enhancements to the supervisory stress test,2
c 9ortunities for additional tax reductions for individuals const vrth the goal of a balanced budget and also consistent with the purpose of reducing government expenditures and giving more spending decisions back to peoole,3
it should also be noted that most of the new banks have been established in large northern and western cities with a heavy concentration of negroes in contrast to the location of the older institutions primarily in the south,0
today we will hear about two facets of the issue of job loss the process and policy affecting firms and what to do for workers postlayoff,0
the nbl survey was particularly valuable because it gathered considerable data on the various characteristics of blackowned  we have not overlooked the fact that a small percentage of negro businesses was also found in costruction manufacturing and transportation,1
while financial market participants are particularly focused on the timing of the first rate increase when it comes to monetary policy timing isnt everything,4
on the other hand if the fomc decides to raise rates by 25 basis points it would automatically trigger additional asset sales of a specified amount during the intermeeting period,4
to address these concerns the regulatory community has adopted a strategy          to help reduce systemic risk from regional disruptions to the clearing          and settlement infrastructure,2
then came the russian default in the summer of 1998 financial markets seized up,2
n o doubt some thrift institutions  poorly managed thrift institutions have however  but even among wellmanaged institutions a sharp  sudden increase in market interest rates can pose an awkward dilemma,2
oats for example have been in high demand in the united states in recent months because of the increased public awareness of the health benefits of oat bran,1
i have long argued that the committee should be more articulate 4  about its policy reaction function so i fully supported the chairmans comments providing this added information,4
however in practicebecause walshs optimal contracts can be roughly approximated at best because both the incentives and the policy decisions faced by central bankers are far more complex than can be captured by simple models and because the appointment of an inflationaverse central banker may provide additional assurance to the public that the government and the central bank will keep their promisesthe walsh approach and the rogoff approach are almost certainly complementary13 that is a clear wellarticulated monetary policy framework inflationaverse central bankers and autonomy for central banks in the execution of policy are all likely to contribute to increased central bank credibility and hence better policy outcomes,4
there is  new awareness in the executive branch of the need to overhaul regulations,3
our special lending programs have also been set up to minimize our credit risk,2
in my remarks i want first to identify the major trends driving change in the financial services industry,2
continued success on the economic front depends largely on political reform namely constitutional reforms that will help restrain fiscal spending,3
the fdic has the authority under fdicia the fdic improvement act to resolve a large bank failure by operating a bridge bank for a limited time thereby reducing disruptions to the financial system while resolving the banks problems,2
younger women are not participating in the labor force much more than their mothers did when they were young,0
different members had different views as to what the tradeoff looked like but as the economy weakened in the recession of 1970 pressure grew to reduce unemployment by accepting less progress on inflation if necessary,0
our examiners have found lapses in operational procedures and internal controls that have led at best to inadvertent errors resulting in some loss to the financial institution or at worst to opportunities for fraudulent activity both inside and outside the institution,2
but unnecessary regulations drain bank resources and reduce the important services that depository institutions provide to households and businesses,2
over the longer run we need to see to it that our financial intermediaries are adequately capitalized to deal with the risks they have taken on and that our deposit insurance and regulatory systems provide the right incentives and constraints to avoid systemic instabilities,2
these businesses tend to be the economic lifeblood of their local communities and this lending facility is designed to forestall mass closures of small and mediumsized businesses on main streets across the country,1
by  contrast upstate new york is less unequal but the disappearance of  manufacturing jobs has held back growth,1
in short intervening in the market process can create moral hazard and weaken market discipline,2
in the next round of submissions due this summer these firms will need to produce plans that show they could be resolved in bankruptcy in an orderly fashion,2
with deposit inflows slowing banks bid aggressively for funds to finance rising credit demands through sales of large negotiable cds,2
at each meeting we report on economic conditions in our regions and share our outlook and policy recommendation for the national economy,4
although both the traditional bank regulatory agencies and the consumer financial protection bureau cfpb are constrained to some extent by the language in the doddfrank act all regulators should aim to ensure that we are not unduly rigid in our actions,2
that is the difference between shortterm commercial lending and mediumterm lending,2
strengthening resilience of financial markets reducing the likelihood of a severe financial crisis also requires strengthening the capacity of our financial markets and infrastructure to absorb shocks,2
the federal reserve has worked with other us and foreign supervisors to strengthen capital liquidity and riskmanagement requirements for banking organizations,2
on the whole by late january the 5 per cent rate applied to about threefourths of all consumertype time deposits 2 there was little upward rate adjustment on passbook savings after mid1966 because tnqst banks were already offering the 4 per cent ceiling,2
the vix measures the us markets expectation of volatility over the next month,2
motivation for the review the fact that the federal reserve is conducting this review does not suggest that we are dissatisfied with the existing policy framework,4
as is usually the case florida promises to outperform the region and the nation on average in terms of employment growth,0
in august 2011 the committee statement included forward guidance that economic conditions are likely to warrant exceptionally low levels of the federal funds rate at least through mid2013a date that was later extended to late 2014which put further downward pressure on longerterm interest rates,4
what this comes down to in effect is placing the maximum practical reliance upon the workings of competitive market forces in order to encourage the kind of performance that we want from our financial systemall this may sound rather trite to youa pledge of allegiance to obvious virtues,2
this linkage of stress testing to bank capital requirements has been a good way for regulators to regularize exercise of their broad statutory discretion to set individual capital requirements on a bankbybank basis8 banks subject to the supervisory stress tests have generally found it to be their binding capital constraint,2
for example in the great recession nearly all of the job loss was concentrated among middleskill workers while employment for lowskill jobs in serviceoriented industries actually kept growing,0
total employment which had remained nearly flat throughout 1982 began  to edge upward once again near the end of 1983 in february the lowest rate in over two years,0
big headlines and graphic news stories are tempting to generalize and may evoke calls for an immediate policy response,4
already because of our growing deficit balance and the new configura tion of competitive factors that is emerging it is becoming clear that we must move toward balance in trade as a national policy,3
although the treasury market remains deep and resilient there are nonetheless reasonable questions as to whether market functioning can be improved,3
on the other hand louisiana whose economy remains heavily  dependent on the sluggish petroleum industry and international trade has begun to show improvement only recently,1
but i would expect the effect to be much smaller initially this time around because profit margins are unusually wide for many foreign firms that compete for market shares in the united states and they are not likely to easily give up the market shares they have capturedthe economyi would characterize the economy over the past year as being in a grey zone between healthy sustainable growth and a growth recession,2
lets look at two dimensions of  regulatory discipline potential closure of the institution and the  effectiveness of supervisory pressure on bank management practices,2
the congress should create a new resolution regime analogous to the regime currently used by the fdic for failing banks that would permit the government to wind down a troubled systemically important firm in a way that protects financial stability but that also imposes losses on shareholders and creditors of the failed firm without costs to the taxpayer,2
the higher unemployment rate in the  first scenario means that monetary policy will be tightened sooner which in  turn will lead to the unemployment rate being higher for longer,0
the effect of losses and additional provisions on bank earnings has been severe in some cases,2
rising government expenditures especially for defense have fostered strong gains in both output and employment in related industries,3
as depositor fears about the health of banks grew runs on banks became increasingly common,2
adding up the capital necessary for all the projects that either promise a profitable private return or appear high on someones list of social priorities for the rest of the seventies yields a total of over 2 trillion,1
in particular it emphasizes the central role of productivity growth in raising standards of living and illustrates what goes into such growth,1
additional fiscal support is likely to provide a significant boost to spending when vaccinations are sufficiently widespread to support a full reopening of inperson services,3
while there have been arguments that the us federal government should use a capital budget such a change is unlikely to help promote saving in the present environment,3
you may have read that the federal home loan bank board recently decided to allow a district of columbia savings and loan association to acquire a troubled association in virginia,2
to be sure buying in stock will have a  positive wealth effect on that companys shareholders but putting the  equivalent amount of money to work in spending on plant and equipment would put  more people back to work more quickly,1
conclusion a zero inflation policy would improve economic performance over the long haul,4
i cannot provide data to demonstrate whether or not we can count at the time we approach full employment on having enough plant and equipment in place to absorb the entire labor force,0
he also ad  vanced the view that remedial legislation would enlarge the revenues and contribute  to a fair and sound tax structure the house ways and means committee began hearings may 3 on the presidents tax recommendations,3
prices of industrial materials have fallen by about 14 percent over the past year,1
by doing what was necessary to achieve price stability the volcker fed laid the groundwork for two decades so far of strong economic performance,4
one is the pressure of inflation on real corporate profits,1
despite these acute problems the uncertainties of current financial markets and the generally adverse economic climate the number of commercial banks recording deeply depressed operating results has remained small,2
the first is that openness may improve the effectiveness of monetary policy,4
housing has been the victim of the surge of inflation as has happened several times before,0
the role of the fed 5 minutes a now lets get back to the role of the fed,4
given that the majority of the american workforce is employed in services and recent trends suggest that future traderelated worker displacements may come increasingly from the service sector the program should probably be expanded,0
because of the lags in the effects of policy changes i want the fed to act ahead of future events that would require policy adjustments,4
in terms of the employment mandate labor market outcomes have been  distressingly weak,0
in my mind the safety and soundness of individual banks the stability of the overall banking system limitations on moral hazard enhanced market discipline and reduced taxpayer liability all begin with strong equity capital positions at individual depository institutions,2
building on our existing banking system also makes sense from a financial stability perspective,2
the participants have to take financial literacy courses and provide a plan for the loan one needed  6  a car to get to work one trained to become a commercial truck driver one started a small business,0
return to text   8 see 2005 interagency proposal on the classification of commercial credit exposures,1
indeed if the federal reserve were to try to limit rising interest rates by increasing supplies of money and credit at an excessive pace the rise in inflation and interest rates that would occur later on would take an even larger tollthe challenge facing monetary policy over the next year or two is a large one,4
when it comes down to the time of making a policy recommendation i must still have a concrete interpretation in terms of open market operations,4
these liquidity pressures were evident in nearly every major country and every central bank had to adapt its liquidity facilities to some degree in addressing these strains,4
her home appraised at 70000 in 2004 was recently valued at 50000 a nearly 30 percent drop in value,0
on the other hand as i noted if the fed leaves the current level of accommodation in place too long inflationary pressures eventually will build,4
with the budget control act of 2011 restraining federal outlays and with pension and healthcare obligations limiting expenditures at the state and local level the public sector is not likely to contribute significantly to gdp growth over the next few years,3
so there has been a trend toward central bank transparency internationally,4
in the less material sphere distinctions a rising out of disparities in income are also being blurred,0
for example while a cdc may offer a unique service that has   market value assessing a fee for that service may conflict with the organizations mission or it may be otherwise inappropriate to charge for certain services,0
bank capital and ultimately the bank insurance fund is at risk if the value of a banks trading book falls rapidly due to a sudden change in market prices,2
in addition most consumer and mortgage loans have fixed rates suggesting that debtservice payments respond only gradually to interest rate changes,0
from what ive just said the answer to why transparency is that we hope to achieve better policy results,4
our financial markets are flexible and resilient and they can absorb shocks surprisingly well,2
at the same time adding to our balance sheet increases the risk we will have to move quickly when the time comes to normalize monetary policy and begin raising rates,4
and we must be evermindful that the central bank cannot carry the load  alone as chairman bernanke and others of us have often said,4
of course the unemployment rate at about 6 percent of the labor force is not exceptionally high by historical standards and one can debate the degree to which structural change and other factors may have affected the level of employment that can be sustained without overheating the economy,0
at about the same time forces within the fed spearheaded an early counterattack on the keynesian view that monetary policy could be relatively ineffective in countering cyclical swings in economic activity,4
then ill discuss some of the effects that changes in the financial environment may have had on the behavior of mortgage markets participants,2
the most effective step to that end i believe is to move toward a balanced budgetas i said earlier it has always been the belief of the federal reserve that monetary policy alone should not have to carry the burden of fighting inflation,3
we conduct an active program of research and data collection often in conjunction with other us and foreign regulators and supervisors including our fellow members on the fsoc,4
the challenge faced today by the vocational departments is how to prevent enrollment from becoming made up largely of boys who are slow learners or who for various reasons find the varied activities of this course less demanding of their talents than the standards required in academic classes,0
given                            that the average mortgage is held only six or seven                            years many houses will be sold or refinanced before                            the amortization period ever kicks in,0
last october the federal reserve announced that it was cha1ging its rrethods of implementing nxmetary policy in ways that would improve its control over the expansion of mmey and credit,4
the researchers found that nearly half of lowerwage employment can be paired with at least one higherpaying occupation requiring similar skills,0
when panic set in it froze lending in banks and nonbanks alike and produced funding pressures across a wide range of markets and institutions,2
in march of 96 i addressed your annual convention in orlando on the state of risk management,2
in the past three months costs faced by the average urban family as measured by the consumer price index cpi have risen at an annualized rate of more than 10 percent,0
my late friend james g vail when president of the society of chemical engineers suggested to his fellow chemists that the problem can not be met by despair cynicism or irresponsibility,1
only about 13 percent of grant county residents lived in poverty during 20062010   by these very basic economic measures therefore sioux countys native americans lagged well behind other americans not only nationally but also just next door in grant county,0
the social security problem is a disaster,0
in short although cash deficits have economic relevance they can provide a misleading picture of the nations longterm budgetary situation,3
i should add though that congress does review the feds budget,3
a notable feature of the boards current framework is the decision to maintain a 0 percent ccyb when vulnerabilities are within their normal range,2
on the side of the banks there has been a tendency for individual country exposure to creep up especially for the large moneycenter banks,2
indebtedness to banks has been increasing in the range of 2530 percent per year since 1978 and there was a special spurt in the final quarter of 1980 when gross ldc indebtedness to banks in countries reporting to the bank for international settlements increased by nearly 11 percent,2
basel iii is not a perfect agreement of course,2
smiths sanction however was directed to the freedom of markets and trade not to the new business elite many of whose business practices smith severely deprecated,1
in 2019 median household income for black and hispanic households rose by more than 7 percent compared to less than 6 percent for white households17 finally these improvements also showed through to wealth,0
return to text 2 according to the most recent report by the new york city comptroller the citys gdp grew 27 percent in the first quarter of 2018 as compared to 23 percent for the nation and the unemployment rate for the city fell to 43 percent the lowest rate on record,0
it was the ice age of international financethere is no compelling reason why the world should ever relapse into anything resembling the conditions of the 1930s,2
they are accommodating actions that prevent the growth in demand for total bank deposits from being frustrated and thus exercising a drag on economic activity,2
this involves securing the consent of something like 99 per cent of the population that they will abide by certain rules,0
we have to adapt continuously to changing      technologies changing bank practices and changing market forces,2
nonbanks offer traditional banking services such as checkcashing and credit services while banks have become sources for securities and insurance products,2
bank holding companies have not been permitted to enter otherwise prohibited activities or markets by acquiring thrifts,2
a second year of economic expansion nationally almost  certainly will bring further improvement in the southeasts unemployment picture,0
i would like to end with a short account of a few measures that government has taken and a few it could take to shorten and ease the trip and to reduce artificial incentives to riskier financial structuresto begin with i would note that the monetary authority has not sought to resolve liquidity and solvency problems by inflating the economy,3
the split is roughly the same for manufacturing,1
this mornings panelists explained that some of the benefits from more effective preschool education accrue to the individuals families and companies making the investments while other benefits accrue to the cities states and the nation as a whole through spillover effects,0
in particular the management of market risk and credit risk has become increasingly sophisticated,2
so last year state and local units registered some progress toward making up the shortfall in borrowing which occurred during the period of credit stringency in 1969  6the largest drop in volume of funds raised occurred among households,0
my colleagues and i are also concerned about the implications of the bank subsidiary form on the safety and soundness of banks,2
a failure to achieve these goals will be the result of an unwillingness to make the political decisions necessary to transform rhetoric about housing goals into concrete programs,3
income that is saved is taxed twice once when it is earned and once again when it generates additional income,3
the monetary character of our transactions with the imf assures that for every dollar we transfer to the imf under our quota we receive an automatically available interest bearing reserve claim on which we can draw foreign exchange in case of balance of payments need,4
economic weakness is demonstrated in growth rates well below potential and deteriorating unemployment measures,0
one focus in recent discussions of financial regulatory restructuring has been the process for resolving the failure of large financial firms including firms without bank charters,2
this affirmation has often been reinforced by the granting of operational independence to the central bank to achieve that goal most effectively,4
employers are partnering with community colleges and nonprofit organizations to offer training,0
a second potentially dampening factor is tax  uncertainty about possible tax changes may cause businesses to defer planned  investment particularly in the near term until the nature o f tax changes likely to be enacted becomes more evident,3
yeartodate through  june our fellow texans have accounted for over 18 percent of the nations  overall privatesector job creation and about 44 percent of jobs created in the  goodsproducing sector,0
already individuals aged fiftyfive and older are working more than they did ten years ago perhaps because of better health higher levels of education and a reduction over time in the share of workers employed in physically strenuous occupations,0
some event real or imagined convinces depositors that their bank cannot meet its obligations to all of them and so they rush to the bank to get their  money back before the bank fails,2
and the financial industry will have become more integrated as banking concerns insurance companies and securities firms combine into financial services holding companies which will supply a full spectrum of financial services to corporations governments and  individuals and supply them more conveniently more efficiently and at less cost than ever beforemost of you will be a part of that brave new world,2
when people feel vulnerable they look for protective  mechanisms both on the personal and national level,0
it is fitting that this event is being held on the 50th anniversary of several notable events including the publication of dr martin luther kings last book where do we go from here chaos or community which urged unity in order to create equal opportunity and the enactment of the fair housing act of 1968 which enshrined our nations commitment to equal access to housing,0
the fed is currently increasing the quantity of reserves held by the banking system by buying securities  both longterm us treasuries and agency mortgagebacked securities,3
we have a new congress,3
an example is  the stake agriculture has in the establishment of a transportation department on a cabinet level,1
bank credit did not eqand as rapidly but still its rate of increase ecceeded the preceding sb years,2
i might  note  in passing  that the fact that no one seems particularly happy with the feds     2    prices the  big  banks  say  the    prices  are  too  low  and  the  small  banks say they are too high might mean that the prices are about right,2
the right monetary policy for these circumstances is continued strong stimulus,4
as a result we conclude that increasing cooperation and communication between banking supervisors and payment system overseers may be necessary both domestically and internationally,2
digitized for fraser httpsfraserstlouisfedorg federal reserve bank of st louis6an additional 10 percent investment tax credit for eligible projects in areas of high unemployment will help communities regain economic health with new or revitalized enterprises,0
1997 chambers dictionary of quotations new york chambers p 554 return to text 6 see ben s bernanke 2006 the coming demographic transition will we treat future generations fairly,0
one thing that our long experience with consumer credit has taught us is that the overwhelming majority of borrowers are honest,0
best practice banks and early research at the federal reserve suggest that significant strides are being made in credit risk management but the industry and regulators still have a long way to go,2
that means that banks of all sizes will have to put more emphasis than ever on creating added value to distinguish their products from those of the big bank headquartered on the other coast from an investment bank or from the market generally,2
our researchers also evaluated the effects of a mandatory counseling program introduced in chicago as a result of a controversial piece of legislation called illinois house bill 40506 this law grew out of concerns that predatory lenders were taking advantage of naïve less sophisticated borrowers in certain markets,0
the procedure amounts to an indirect way of influencing the funds rate and other shortterm rates which in turn affect the demand for money,4
it seeks to protect the dif by combatting what would otherwise be moral hazard and subsidized funding through capital requirements activities restrictions and other measures,2
firms in the second tierthe moderately complex firmscan pose risk to the financial system under certain circumstances,2
more important some have blamed overseas competition for the job losses associated with the economic slowdown earlier in this decade,0
with all the worlds banks on the same regulatory structure these critics argue the typical business cycle will be accentuated by basel ii as perfectly reasonable estimates of probabilities of default and of loss given default decline in economic expansions and rise as the economy weakens,2
the most recent data continued to show that the severity of the foreclosure problem has been uneven across the country with arizona california florida nevada michigan and ohio for example suffering from higher rates than many other parts of the country,0
this increase was accompanied by a significant easing in the terms on which consumer credit was extended particularly  credit to purchase new automobiles,0
it should be noted furthermore that since social security is on a payasyougo basis at best it does not lead to an accumulation of capital as does private saving,0
macroprudential tools are primarily regulatory or supervisory in nature and target specific activities markets and financial institutions,2
for example negroes represented 24 per cent of the total employment in credit agencies and in stock exchanges and securities firms,0
the focus of the treasurys work is on the appropriate design principles for our regulatory systemincluding the systems structure and governance the appropriate scope of regulators responsibilities and how those responsibilities should be allocated across agenciesrather than on the specific issues raised by the current crisis,3
the regulation provides that the creditor may require any missed minimum payments to be made up,2
indeed analysts have shown that a comprehensive    understanding of basic principles of budgeting and saving at the start    increases household wealth in later years,0
securities prices informed in this way should translate into higher funding costs when greater risks are undertaken facilitate the appropriate level of monitoring for the effective management of counterparty risk and help bank supervisors judge the financial condition of firms,2
in those days farm credit leaders had no need to concern themselves with the aggregate supply of funds,1
past experience shows that the central bank has a difficult jo b in achieving the sometimes conflicting goals of econom ic growth high employment and a strong dollar at home and abroad,4
the british bankers association for example reports that the notional value of credit derivatives has grown from less than 200 billion in 1997 to nearly 2 trillion in 2002  our own bank call reports indicate that late last year us commercial banks held credit derivatives with notional values of more than 800 billion which may represent onethird of the global market,2
the other economic benchmarks have been strong too civilian unemployment has been below 5 percent since july 1997 and hit a 30year record low of 39 percent in april before ticking back up to 41 percent for may,0
6the developments in the payments area are particularly interestingwe have tended to be preoccupied with the pricing and other requirements mandated by the monetary control act and may be overlooking the fact that some of the major retailerssuch as wards penneys and searshave already established their own proprietary nationwide eft systems,4
another constraint on monetary managers in the late summer and fall of 1967 was the fear of a financial panic,2
the  challenge to the smaller nondiversified institutions could be great indeed,2
as you well  know banks first began to vigorously pursue improved earnings by managing their asset side so as to increase yield and did so at the expense of liq uidity,2
the7the balance of payments finally and the value of the dollar woul be hurt by the capital outflows that a policy of extremely low interest rates would set in motion,4
the federal reserve has urged that the delayed availability problem be resolved instead through the voluntary efforts of depository institutions or at most statutory provisions on disclosure and on expediting the check clearing processwhat are we to make of recent congressional initiatives toward greater regulation of financial markets,2
the contention is that the skills of workers in these sectors do not readily transfer to other sectors and thus they will have a particularly difficult time finding new jobs,0
a relatively small part of the changes in the futures rates comes on days fed officials give speeches or testimony,4
as of today  the total footings of the federal reserve have expanded to roughly 2 trillionmore  than a twofold increase from when we started in 2008 it is clear that we stand  ready to grow our balance sheet even more should conditions warrant,4
while it is difficult to know with precision how much slack still remains i am seeing more evidence that labor markets are tightening and wages are accelerating although at a measured pace,0
these include not only such large facilities as lockheeds military aircraft plant and several auto assembly plants but also    5   numerous small computer and electronics firms operating in the city and its environs,1
very sophisticated investors left the intermediary behind and invested directly in stock index futures,2
conclusion        this morning i have reviewed the outlook the federal reserves response and its policy options for the future should the recovery falter or inflation decline further,4
moreover these large exposure limits will effectively update the traditional bank lending limits that proved useful for well over 100 years for todays challenges by recognizing the many ways in which banks and their affiliates take on credit exposure beyond directly extending loans,2
recall that the demand decline involved a portion of a relatively small sector of the us economy,1
what happened to the great us job machine,0
without credit some customers were unable to meet their margin calls and were forced to liquidate their positions,2
that fundingauthorized by an administration seeking marketbased alternatives to public housingreflected an important enduring publicpolicy objective increasing the nations homeownership rate,3
taking into account the fiscal effects of the exchange rate change alone however would be misleading,3
some serve a vital purpose of education and information directly pertinent to the economic welfare of the city and its hinterlands,0
the advent of genetically modified organisms in many crops which follows the advances in genetic improvements applied to livestock production promises both increased production and reduced reliance on pesticides,1
third financial market functioning could at some point become distorted as a result of the federal reserves large and growing presence in mortgagebacked securities and treasury securities markets,4
return to text 2 see board of governors of the federal reserve system 2009 federal reserve occ and fdic release results of the supervisory capital assessment program press release may 7 and ben s bernanke 2009 the supervisory capital assessment program speech delivered at the federal reserve bank of atlanta 2009 financial markets conference jekyll island ga may 11 return to text 3 because most large financial firms are multinational the development of an effective regime will require consultation and collaboration with authorities abroad,2
lastly investments in selected infrastructure improvements could help create greater eUFB03ciencies in the us economy,3
at all times probably a considerable fraction of humanity has gone hungry,0
a key questionhow much risk is being transferredhas been difficult to answer due to the participation in the market of many types of regulated and unregulated investors and firms as well as the fact that participants simply reverse or close out one exposure by entering into an additional and offsetting one as they do with other types of swaps,2
furthermore regulation often weakens the institutions that it sought to  protect making it difficult for them to adjust to new market realities,2
monetary policymakers face lots of uncertainties and unknowns regardless of how decisions are reached,4
these are not resilient longterm solutions for our dynamic economy and the banks that support it,2
financial products services and transactions lend themselves to successive waves of technological disruption because they can readily be represented as streams of numerical information ripe for digitization,2
2  no balancedbudget multiplier,3
the objective  was not to bring down the stock market but rather to bring the growth of aggregate demand and aggregate supply into better alignment,1
i the evolution of monetary policy mandates a good starting point is a survey of mandates around the world,4
more organizations should get behind efforts to improve investor knowledge,2
within the treasury bond market offtherun issues trade at much higher than usual yields relative to ontherun issues,3
9 the concept of a thrift test to determine whether a thrift would continue to retain certain broader investment powers and other traditional privileges including longterm fhlb advances and commercial ownership has gained rather wide agreement,2
most of us in the fed take an eclectic view of the money supply and interest rates,4
small businesses are very susceptible to swings in the economy and have a much higher failure rate than larger operations,1
for the industry overall the federal reserves rate cuts last year may have proved to be a mixed blessing,2
for instance there has been no increase at all in the amounts invested annually in the manufacturing industries after making allowance for higher equipment prices and for types of investment that serves to protect the environment rather than to increase output,1
some commentators have argued that the real fragility in the system will be exposed when interest rates return to morenormal levels,2
another factor that makes our city an excellent place to do business and explains why the jobs are available in the first place is that atlanta has become a crossroads for producers and suppliers all over the eastern united states,1
with  real gnp growth probably in the  consumer spending is likely to remain healthy since personal  income and employment continue to advance,0
all in all we have approximately 6 million more people of working age  than we did when the recession beganand a net loss of 77 million jobs,0
according to table a1 an increase of 1 percentage point in labor force growth would raise the equilibrium real federal funds rate by 115 percentage points,0
democratizing credit to enlarge the global middle class efficiently allocating capital and dispersing risk exposuresthese remain compelling practices for private market participants throughout the world,0
3  regulators have already examined every bank twice and weve found that 99 percent of banks are making satisfactory progress toward y2k readiness,2
forces tending to reduce welfare through trade barriers are better financed and more powerful than the forces active in promoting welfare through freeing trade channels,3
pressure on the banks became so great that in march 1933 shortly after his inauguration president roosevelt declared a banking holiday for the entire nation,2
these findings offer important lessons for all of us who are interested in maintaining efficient financial markets that are undisturbed by systemic risks,2
we also believe that understanding the issues behind concentrated poverty will help us better assess overall economic performance,0
this agreement has set price stability as the principal objective for monetary policy,4
taking those in turn first while economic strength and sustainability are important we need to ensure theyre inclusive,0
looking to the future policymakers need to appropriately refine the regulatory and supervisory framework to minimize unnecessary compliance costs for smaller banks and address impediments to bank formations,2
now in the process of being im plem ented by some     145 banks which account for 90 percent of the banking business in c alifornia sc o petype projects are under active consideration by banks in some 20 or m ore other areas in the nation,2
however the increase in inflation is principally a result of the dissipation of the direct effects of recent favorable supply shocks,1
in addition businesses are in the process of moving from liquidating inventories to restocking them,1
we  cannot succeed in a globalized world without superior educational institutions,0
we have seen growing evidence of credit granted solely on the expectation that current robust conditions will continue indefinitely with little thought as to how borrowers might perform under more stressful conditions,2
total required balances in recent years have been around 20 billion divided roughly equally between required reserves and contractual clearing balances6 banks may also choose to hold balances at the fed in excess of their required balances,2
there are probably other factors involved but i will only mention a few of what 1 consider to be the major forces for changethe thrift industrys financial crisis in the early 1980s has to be considered one of the major factors contributing to the ongoing change in interstate expansion policy the need to find acquirors for financially troubled thrifts helped to change attitudes toward interstate financial operationsafter the difficulties encountered in resolving the franklin national bank failure in 1974 the federal reserve board regularly recommended allowing outofstate bank holding companies to acquire large failing banks,2
patterns of trade are distorted,1
nonfarm payroll employment also  fell less sharply in march than in previous months,0
at any given time there are flows of employed and unemployed people into and out of the labor force,0
there is however another productive resource  labor it is in short supply presently and if taxes are not increased it will be in much shorter supply during 1968  but as the unemployment  rate decreases wage settlements get bigger and prices tend to increase,3
under laissez faire there would be an absence of conditions under which the government could impose under the auspices of powerful special interest groups mean and malignant expedients on the community in the guise of the public good,3
and i dont think there is a lot more elasticity in tuitions,0
the only way we can accomplish this is by consuming less of our own production and exporting more,1
the chief objection of course is the characteristically american notion embodied in such hackneyed but meaningful expressions as the free enterprise system freedom of competition and the like,1
the great conservative economist of the twentieth century milton friedman has long espoused an unconditional rule that would have the fed simply allow the money supply to rise by about four percent a year the rate friedman determines would lead to approximate long run price stability,4
unemployment averaged over 5 per cent,0
the opening up of china and india in particular represents a potentially huge increase in the global supply of mainly lowerskilled workers,1
for consumers to contribute more to the continued expansion of the economy job growth needs to strengthen,0
they are also finding financial markets more receptive,2
the unemployment rate in northeastern pennsylvanias largest metro area scrantonwilkes barrehazleton has been cut in half falling from a high of 10 percent in 1992 to 434 percent now,0
the challenge is that the level of employment  that is indeed maximal is largely outside the control of monetary policy and  moreover varies over time,0
international aspects the growing internationalization of banking adds new dimensions to regulatory and lenderoflastresort responsibilities,4
second the rate at which social security benefits are growing has slowed particularly when compared with the decades prior to the mid1980s,3
continued reforms in the area of monetary policy seem to be leading toward more reliance on the determination of interest rates through market forces,4
of primary importance is the establishment of confidence in a stable and secure economic and financial environment,2
together we can begin to ask the important questions about education and public policy and then use what we learn to help build educational systems we can all be proud ofsystems that will help our region and our country prosper,3
the point being that even the best policy communications wont be able to prevent market swings all the time and policymakers and markets need to understand that,4
my third observation is one 1 really need not make before this  monetary policy is not an allpowerful economic stabilization  device and good monetary policy does not automatically guarantee full employ ment good growth rates and price stability,4
it calls first  for rolling back the federal safety net to apply only to basic traditional  commercial banking,2
and finally they may choose to establish or acquire a nonbank financial firm that is subject to less regulation than a chartered and insured financial institution,2
the united states also enjoys high rates of new business creation which complement beautifully the flexible labor market,1
moreover given a few reasonable assumptions about the overall rate of economic growth we can be fairly certain of the trends in the level and occupational distribution of employment and the level and distribution of personal income between the white and black communities,0
during these transitions the relative attractiveness of neighborhoods can be affected by various factors such as the level of homeownership the educational attainment of residents and crime rates,0
independence is essential if a central bank is to play its fundamental role in preserving the purchasing power of a fiat currency,4
capacity utilization has been rising,1
reforms are being built on the region s considerable  natural and human resources and on an industrial base which is large though often inefficient and in need o f modernization,1
the new york fed offset this increase in the demand for reserves by adding a significant amount of funds on friday aug 3 through its open market operations so as to keep the funds rate near the fiveandaquarter percent target,4
the development of sustainable capital sources through innovation is an important goal for the community development financial institutions cdfi industry,0
federal reserve vice chairman ferguson emphasized how past industry efforts at business continuity planning had paid off during the crisis,1
labor markets alongside solid economic growth labor markets have continued to tighten,0
in fact across the whole system about 4000 fewer people work at reserve banks today compared with 20031 like the rest of the world we at the federal reserve have harnessed the power of technology to become more efficient,4
multifamily commercial and other mortgage credit accounted for over 9 billion of this rise reflecting the boom in such construction,0
at the same time in the early 1960s fiscal  policy became more expansionary through a series of moves including liberalized depreciation rules an investment tax credit and a sizable personal and corporate income tax cutthe nation enjoyed a fiveyear period of unparalleled sustained economic growth with total output of goods and services increasing by 175 billion between the end of 1960 and the start of 1966 just to indicate the magnitude of this increase it was more than the value of our total output in 1942 in addition this expansion was achieved in a noninflationary mannerthat is prices were comparatively stable during this long period of continuous prosperity,3
families who a couple of years ago were looking forward to a second car or a second home or a bigger and better vacation every year who were willing to borrow against future paychecks to get them and businesses who were looking ahead to new product development and acquisitions for balancesheet building suddenly found themselves having difficulty just paying the grocery bills or coming up with enough working capital to continue operations,0
like any wellmanaged  economic unit as part of its planning activities the system is const _ antly reexamining its objectives and goals to ascertain how its functions can best contribute to the achievement of societys goals,0
of the 244 bank holding companies in our district four are among the largest 25 domestic bank holding companies in the country,2
c fomc increased fed funds a quarter of a percentage point to 5 percent in june,4
although many shadow banks had limited exposure to subprime loans and other questionable credits the complexity of the securities involved and the opaqueness of many of the financial arrangements made it difficult for investors to distinguish relative risks,2
measures of consumer confidence are at high levels,0
but when the economy is already operating at full capacity productive facilities can be expanded only if resources are diverted from the production of goods for consumption neither investment nor consumption can be expanded further simply by inflating the flow of money with additional bank credit,1
but the wise use of credit enables individuals and families to accumulate wealth make sound investments and avoid costly financial mistakes,0
but they dont tell us much about bankinges ups and downs in the past 30 years nor do they reveal changesand very important changes they aretaking place within our economy and within the banking and financial structure itself,2
it is highly important to recognize that the issue of assistance to new york city goes to the very heart of our system of separation of powers between the federal and state governments a system that despite enormous economic and social changes is still honored by our country,4
the government owns all property and allocates the  it can channel capital into any area that needs bolstering,3
the growth of bank earnings has exceeded that of most corporations,2
these markets provide the shortterm credit many businesses need to keep operating and meet payrolls,1
their advice has been especially valuable to us these last several years when weve had to face problems of high inflation high interest rates and sharp fluctuations in business activity,1
in order to bring growth rates of the aggregates more in line with the established targets the federal reserve on october 6 announced a new antiinflationary program involving an increase in the discount rate and new marginal reserve requirements,4
the midwestern farm belt the oil patch o f texas louisiana and oklahoma  and the industrial heartland o f the northeast and northcentral states should now see much more growth,1
i think this idealized picture takes us a long way toward understanding how monetary policy and the markets should interact when policy is on a successful track,2
but this is not true of many of todays new industries2 sounds familiar doesnt it,1
over the past 14 years the policy summit has brought together community development practitioners researchers funders policymakers and others interested in strengthening our communities so that all people have the opportunity to productively engage in our economy and to share in its benefits,0
modern assetpricing theory may have begun in academia but its growth and application have quickly taken root in money capital and banking markets in new ways of thinking about risk ways that essentially meant measuring risk in quantifiable ways,2
the northeast states have granted checking account power to savings institutions in some cases for many years,2
it is noteworthy that despite the burdens of the pandemic the council has found creative ways to carry on its mission including its support of teachers the national economics challenge and this speakers series,0
thus if judged by the banks national and international reputation for monetary research and by the policy changes it helped to bring about the st louis federal reserve banks influence extends far beyond what dc johns might ever have imagined,4
the fed today       the federal reserve systems current mandate of maximum employment stable prices and moderate longterm interest rates was established by an amendment to the federal reserve act in 1977 the congress in effect recognized the principle of instrument independence by requiring that the federal reserve board report semiannually directly to the congress about the boards and the fomcs plans to meet these objectives and by exempting monetary policy from government accountability office gao review as part of the full employment and balanced growth act of 1978             by passing these two pieces of legislation the congress put in place a mechanism for holding the fed accountable for meeting its statutory mandate,4
with these assumptions the model predicts that singlefamily housing starts will total about 14 million units this year which we can compare to the actual 15 million units in 2006 this projection for 2007 which would be a 25 percent decline from 2006s average appears to be at the highend of most forecasters expectation perhaps because the model just outlined makes no allowance for the overhang of excessive inventory at the beginning of this year,0
despite the plethora of new rules and regulations created by doddfrank market  discipline is still lacking for the largest financial institutions as it was  during the last crisis,2
we have to have  monetary and credit policy to keep the supply of money in balance with the needs of the economy because if we did not the balance probably would be lacking most of the time,4
we also looked at the people doing those jobs who would be hardest hit and where new jobs would likely be created,0
during the same period part of this reduction in riskiness reflected improvement in state regulation and supervision,2
they will spend millions  of dollars to try to perpetuate their brand of crony capitalism,2
this proposal was designed to address institutions concerns that a depositary bank would be required to make funds available for withdrawal before it would receive credit for the check through the check collection process,2
still the simple comparison does not suggest that there is a problem in continued use of the trend money growthinflation relationship for policy purposes,4
heretofore the severest restrictions have involved wheat dairy products and sugar while livestock products coarse grains and oilseeds have been handled on a more liberal basiso commercial adjustments required for industrial products within the common market are simplicity itself as contrasted with the emerging agricultural provisions,1
the banks under 25 million of assets had a higher return on assets 156 than the banks with assets over 250 million 108,2
the real threat to democracy comes from undermanagement not from over management,3
on net the resulting drop in the average interest rate on household borrowings combined with the lengthening maturity of their total debt has damped the monthly payments made by homeowners on their growing stock of outstanding debt,0
the first area that i think could benefit from a fresh approach is our requirement for the active marketing for sale of properties acquired in foreclosure often called real estate owned or reo properties,2
based on its discussion the fomc decides where to set its target for the federal funds rate,4
accordingly commodity prices like the prices of financial assets can be volatile as market participants react to incoming news,2
it is unfortunately a truism that regulation begets further regulation and that regulations outlive their rationale,2
thus in many respects the persistent inflation of the past decade and a half has adversely affected the banking industry and lias created a situation which must be reversed for the benefit not only of bankers but of the vast public which depends so much upon the existence of a sound and profitable commercial banking industry,2
i would like to talk to  you today about the shifting focus of policyparticularly as it relates  to how the rate of growth in money is viewed and should be viewed by policymakers and observers alike,4
entry into the banking business was relatively easy but bank branching was very restricted,2
companies make their decision about where to locate based on what elements are most important to them,1
and society as a whole realizes or should realize that the debt will ultimately be repaid through higher taxes,3
however in my judgment our financial system has clearly reached the stage where pressures from the market will force dramatic changes regardless of existing statutory and regulatory limits,2
trends in labor employment and unemployment in 1972 there were 96 million blacksi in the labor force,0
these standards seek to limit the effect of shortterm outflows and extended overall funding mismatches thus improving banks liquidity resilience,2
the agencies constantly update their training of examiners who conduct cra assessments and continue to review together the results and trendsnext week in fact the federal reserve system will be conducting another weeklong training course exclusively on cra66 programs and innovative secondary market approaches the level of creativity and activity is in many cases impressive,2
if proposed future capital distributions are not assumedthat is if the approach in the 2009 scap is takenonly one firm falls below the required poststress minimum capital ratios,2
in the end there is reason to believe that these instruments can help importantly to place housing finance on a more solid foundation especially compared to the limited availability or relatively high rates on fixedrate mortgages,0
that is essentially the story i laid out in a paper delivered at the kansas city fedâs jackson hole conference about ten years ago7   in my view such an increase in uncertainty is an important part of what we have observed recently and stems from heightened concerns about the value of financial securities related to certain types of loans about who is holding these securities and about how a revaluation of these securities might affect the balance sheets of various financial intermediaries,2
in addition the sandilands connnittee reconnnends a sources and uses of funds statement to alert readers to the liquidity needs of the firm,2
that is to say that once a bill had been introduced or a direction established for congressional action fed staff would work with congressional staff to refine and rework the proposals,3
it would be helpful to invite the treasury secretary or under secretary to an fomc meeting from time to time for an exchange of views,3
moreover partly as a result of these practices weve seen an unprecedented housing market collapse that contributed to a very deep recession marked by many lost jobs,0
supporting the assetpreference shift hypothesis is the fact that foreign lending by us commerclal banks has declined dramatically in recent years reflecting the international debt crisis,2
at home while growth has been reasonably satisfactory unemployment and inflation continue at excessive levels,0
the working cities challenge promotes that principle by inviting smaller massachusetts cities to consider how they would use collaborative leadership to unite their communities to address a major challenge for lowerincome residents,0
in this economic downturn the fraction of the workforce unemployed for six months or more has climbed much more than in previous recessions and remains at a remarkably high level,0
the capital outflows associated with the persistent current account surpluses were large even in net terms and combined with relatively restrained business capital spending in many advanced economies including the united states put downward pressure on real interest rates globally4           from a purely theoretical perspective there is no compelling reason to believe that low real interest rates by themselves pose a particular risk to global economic and financial stability as real interest rates should be driven by underlying forces to balance the global demand for saving and investment,2
this would undermine the feds credibility and its ability to conduct monetary policy in the longterm interests of the american public,4
asset prices rise to unusually high levels  leading to concerns about bubbles the mediumterm inflation outlook rises  temporarily above 2 percent,2
we should work together relying on the leadership of home country supervisors to analyze banks on a consolidated global basis as the financial market does,2
can all of the corporatiois wishing to borrow meet their needs,1
it demonstrated in practice not just in theory the value of a simultaneous forwardlooking projection of potential losses and revenue effects based on each banks own portfolio and circumstances,2
indeed the surge in mortgage refinancings likely improved rather than worsened the financial condition of the average homeowner,0
they  are not illinformed about the particular banks that are doing it,2
q for this reason the fomc moved to ease monetary policy slightly,4
the decade to come will be marked by failure and absorption of these firms and of any others that are practicing growthmanship in defiance of new regulatory limits,2
so although more can be done minorities and others who in the past had difficulty obtaining credit are sharing in the gains,0
vacancy property value and financing are connected of course,1
small businesses are also an engine for building a more racially equitable economy more than 8 million small businesses are owned by racial minorities,1
6 on the other hand our experience with financial markets leads us to believe that shortrun variations in interest rates if sharp enough can have disruptive effects on the functioning of financial markets,2
the philadelphia feds manufacturing business outlook survey has proven to be a reliable indicator of manufacturing trends in the us in october manufacturers reported the eighth consecutive month in positive territory and well above its average nonrecession level,1
i intend to work with my colleagues so that the fednow service meets the needs of community banks and their customers,0
and many countries have privatized governmentowned institutions like banks airlines and telephone companies and left the firms fortunes to be decided in the global market place,1
over the same period the priceearnings ratios of commercial banks fell by roughly 65 per cent,2
and those of you who  have been associated with the banking industry for the past 10 or 15 years realize how dramatic some of the changes have been,2
in particular deals are smaller financings are reportedly arranged on a best efforts basis and banks are said to maintain considerable contractual flexibility postcommitment to adjust the pricing and structure of loans at the expense of borrowers to marketclearing levels7  a second question is whether leveraged loans are being funded on any significant scale using mechanisms such as repo funding total return swaps and other otc derivatives and collateralized loan obligations or clos that were prevalent before the crisis,2
the simultaneous assessment of the payout requests in the capital review allowed the federal reserve working through the liscc to evaluate not only the conditions of individual banks but also the potential implications of capital payouts for aggregate credit extension and the sustainability of the economic recovery,2
gold would have to flow into the treasury which would issue gold certificates to the federal reserve in just sufficient volume to keep the money supply growing stably,4
but forecasts come with obvious risks and moving policy on them should be done with careful riskmanagement calculus in mind,4
taking advantage of the diminished home values the group buys the properties and then resells them at affordable prices to existing occupantsâboth owners and tenantswho can demonstrate that they have suffered hardship,0
the fed controls the federal funds rate by controlling the supply of federal funds,4
its holistic range of programsin community leadership quality affordable housing and economic developmentappears to be contributing to decreasing crime rising student grades and homes for firsttime homebuyers,0
second we should always keep in mind that the federal reserve has essentially only one policy instrument,4
by  httpwwwclevelandfedorgfor_the_publicnews_and_mediaspeeches2010pianalto_20100911cfm4292014 15211 pm  regulatory reform the new face of bank regulation  september 11 2010  federal reserve bank of cleveland  ensuring that no one firm can be too big to fail the playing field is leveled and the perception that the very largest firms will always benefit from some implicit government guarantee against failure is addressed,2
a byproduct of these developments will be that outsiders will have ever more difficulty understanding the risk positions of many large complex organizations,2
the mispricing of risk and the resulting uncertainty also reflected skewed incentives,2
congress has also seen fit to add two new patterns  of regulation truth in lending and bank protection standards,0
when the national banking system was established a century ago perhaps a banking structure composed of thousands of small institutions was necessary,2
wage agreements also seem to be made on the assumption that dollars will continue to depreciate in value at recent rates,0
no description of the southeastern economy would be complete without  discussing  the  greatly to job growth,0
we have the highest percentage of the population employed that we have had since world war ii,0
recently the us banking agencies issued proposed supervisory guidance on managing cre concentrations,2
instead of giving you more prophesies since you are constantly bombarded with predictions i will reverse the process and suggest what factors should be watched that are lk 1 ely to influence central bank policy,4
better and earlier information for consumerslastly to protect consumers and promote competition our proposed regulation would prohibit misleading mortgage advertising and require that consumers receive loanspecific disclosures early in the application process when they can use the information to shop more effectively,0
that preparation begins very early in life before a child even enters kindergarten and continues through high school,0
for people to be willing to buy stocks another way to channel funds to business rules must be established to ensure that the managers of corporations act in the stockholdersâ interest,1
it may be that even agriculture is affected by this resistance t o change in some of the efforts to support the continued operation of uneconomic units that are no longer able to compete in this dny of advancing technology in agriculture,1
while the sarbanesoxley act and new securities and exchange commission regulations are directed to public companies the message i hope to convey today is that aspects of these reforms can provide benchmarks for private and community banks who wish to strengthen internal controls,2
finally the spirit of entrepreneurship is stronger today than at any time in my memory,1
in recent years businesses that provide servicesnot just doctors and lawyers but the whole range of services including banks airlines restaurants and stores  have been creating jobs much faster than factories that produce goods like clothing and cars,1
the issue is not simply providing consumers with more information about the features of financial products it is building their understanding of the workings of the financial system,0
1962  economic activity expanded and generally  small hanks responded hy expanding loans,2
the audit committee should actively engage the internal auditor to ensure that the banks risk assessment and control process are vigorous,2
economics provides considerable guidance on how policymakers should respond but the timing and size of the response is frequently unclear,4
this concerns what is or should be the business of banking and this applies whether or not the bank involved is affiliated with a bank holding company operation,2
the unemployment rate is still 25 percentage points higher than it was in february 2020 and we know that it is even worse for some groupsânearly 10 percent for black workers and nearly 8 percent for hispanics,0
and a new equilibrium will take shape only when financial institutions seize new opportunities and the changes in the rules of engagement and the relationship with the official sector are more clearly understood,2
congressman oxley stated that the payasyougo structure of the system combined with continuing demographic trends drives the current need for reform,3
second the president extended the power of the federal reserve to impose credit restraints and reserve requirements on nonmember banks on banks that are not members of the federal reserve system,2
one of the indices we follow is the stock investors fear index,2
housing is low on the public policy agenda and even our family structure is significa11tly different,3
there are indications however that our banking systems ongoing evolution may be making these traditional measures less reliable as indicators of the degree of competition in a given market,2
only in 1983 did lower costs of funds contribute noticeably to an improvement in thrift profitabilityeven then thrifts still faced an overhang of lowyielding longterm fixedrate mortgage assets that rendered them vulnerable to increases in market rates,2
manufacturers were operating at an average rate of 90 per cent of capacity throughout the year and the rate in some industries was well over 90 per cent,1
mortgages with some of the characteristics of nontraditional mortgage products have been available for many years however they have historically been offered to higherincome borrowers,0
based on the joint findings of the agencies we supported fhfas decision to place the companies into conservatorship as necessary and appropriate given their conditions and systemic importance,3
and the federal reserves legislative mandate allows it to make independent monetary policy decisions,4
i fully expect progress to continue ultimately leading to a labor market as strong or stronger than we saw before the pandemic,0
second the relatively rapid income growth expected by developing economies as they catch up to industrial countries should provide them with incentives to borrow against their expected higher future incomes,2
competition probable benefits exceed probable costs  how will  interstate banking affect  competition,2
in short complexity in many cases provides options and in most cases is simply a part of modern finance,2
the committee has stated that the target federal funds rate would likely stay fixed until the official unemployment rate reaches a threshold of 6 12 percent,0
since september 2008 the fed has increased total market liquidity while altering the allocation of credit to particular markets,2
the course also explains the homebuying process,0
when you compare this  figure to the number o f commercial banks in the united statesa total o f 15000 with 55000 offices engaged in fullservice banking you can see that we have an enormous amount o f interstate banking already,2
if you tell people that your bank is a friendly bank and the tellers or telephone operators are rude or impolite or just plain unfriendly the customers then begin to question everything you say,2
were actively involved in promoting personal financial education to anyone who is interested not just small business owners,0
this possibility would be increased if market participants attached undue weight to specific capital or loss numbers released by the government,3
participants also provide their assessments of the appropriate monetary policy that supports those forecasts,4
one concern i have is that the public instead thinks the fed views 2 percent as a ceiling that it aims to keep inflation under,4
people debated whether the federal reserve should be located in washington dc or in new york city,4
we also expect it will be appropriate to maintain the current target range for the federal funds rate at 0 to 14 percent until labor market conditions have reached levels consistent with the committees assessments of maximum employment until inflation has risen to 2 percent and until inflation is on track to moderately exceed 2 percent for some time,4
if necessary a larger part of credit needs could be satisfied through the open market or through nondepositary financial institutions,2
other research being done at the atlanta fed shows that we should not rely on old strategies that tout manufacturing and commodities as the only basis for growth,1
but the bar for such action remains very high for me until the fiscal  authorities do their job just as we have done ours,3
whatever tax formula comes out of the committee will be subject to scrutiny by the senate and by the american people,0
these customers are richer to personal income is at an annual rate of 510 biliion now compared to 73 billion in 1924 using gnp as a convenient proxy for measurement todays annual rate of nearly 650 billion is over seven times that of 1924 since the depression year of 1934 there has been an even more impressive 10fold increase,0
in addition they could not operate across state lines and could deal only in classic financial intermediation activities deposittaking and lending,2
the guidance also recommends that institutions alert consumers to the amount of any prepayment penalty that may be imposed if the consumer refinances the mortgage,0
they will have to adapt to geographic deregulation just as most have successfully adapted to deposit interest rate deregulation,2
for example although subprime lending has grown substantially are prime credit products sufficiently available and do lenders effectively compete in all communities including historically underserved communities,0
the cab has approved the u s airlines request for authority to bring 2000 active travel agents tour  16operators and travel editors to the us this year and next for the purpose of familiarization tours,1
in the united states signs of froth have clearly emerged in some local markets where home prices seem to have risen to unsustainable levels,2
if investors began to exercise their put option in large numbers the bank in question would have to issue new debt or perhaps sell assets to remain in compliance with regulations,2
the debit transfer check is outmoded by the computer the recent english giro system installation dramatizes this factsimply put if we are going to use computers in banking we cannot avoid an ultimate breakdown in our capacity to make paper flow as fast as electronic data processing and transmission unless we have a more efficient mechanism than the check for authorizing money payments within the banking system,2
this is consistent with what i heard from one oklahoma banker who said the biggest threat to his longterm survival was regulatory burdenâbut not so much in the last few years,2
this point is illustrated forcefully by the high failure rates encountered by insufficiently diversified unit banks in the agricultural and energy producing regions of our country,2
for example of the 163 thousand firms reported in 1969 only 38 thousand or less than onequarter of the total had any paid employees at all,1
however special institutions are needed to preserve the reservation land base,3
we will have failed in our responsibilities as monetary policymakers,4
we measured the perceived permanence of policy changes by observing the effects of unanticipated policy changes on the expected federal funds rate three months in the future as measured by the futures market,4
and if carried far enough these policies could threaten world trading arrangements by promoting an environment fostering protectionism 14 14 inappropriate policy policies that deliberately prohibit or restrict foreign investment are potentially very dangerous,2
which would facilitate broader services for the public,0
among them were his studies of the relationship between the economic and political arrangements of a society,3
banks merely channeled funds to borrowers who were political allies relatives or industrial partners,2
a healthy world economy increases us exports,1
the midwest preceded the nation into the 2001 recession and manufacturing employment here has been falling longer,0
in addition stresses remain evident in certain asset and credit markets even though financial market conditions today appear much improved from their august nadir,2
i would like to see  congress eliminate this double tax on equity income,0
then just about a year ago business spending began to turn around led by renewed investment in hightech equipment and software,1
but i believe this approach also applies to the revitalization of older communities,0
banks as a whole were gaining time deposits at about 55 per cent of last years rate,2
if you had turned to page 2 of the wall street journal on monday you would  have seen a felicitous headline that read feds lending ebbs as crisis  subsides the leading indicators for june that were released on monday by the  conference board do indeed hint at a crisis subsiding the index rose for the  third straight month and in doing so has registered gains comparable to those  seen last in the economic recoveries of 1991 and 200102,4
o ur price statistics are generally reliable but our conventional indicator of unemployment has been unsat isfactory creating a serious problem for policymakers,0
this would limit the ability of the fed to engage in credit policies that target specific industries,1
the costs to all of us of having firms deemed too big to fail were stunningly evident during the days in which the financial system teetered near collapse,2
so the fomc is able to set a longer run numerical goal for inflation and should be held accountable for achieving that goal,4
the financial crisis has shown how true that is whether the economies and institutions are local national or even global,2
we are also meeting with agencies such as the federal housing finance board and the national credit union administration to discuss liquidity issues that might affect the institutions they supervise,4
a fter world war ii the south attracted textile apparel and other  laborintensive industries from the north with the promise of low wages and low taxes,1
in this cynical age there is considerable discussion about government programs that do not work and some perception that political partisanship will foil all efforts to bring about real community improvement,3
with spending by the federal  government expected to slow activities in these industries may be hampered,1
yet this option obviously risks imposing significant costs on the taxpayer and supports the notion that some firms are toobigtofail with consequent negative effects on market discipline and competitive equality among financial institutions of different sizes,2
it in turn has issued regulations that provide for the emergency operation of federal reserve banks and authorize them to make reserve credit available to both member and nonmember banks with the objective that no bank be inhibited by a real or fancied lack of funds from carrying out essential operations in support of essential purposes,2
housing is a basic human need and politically importantââand rightly so,0
for consumers technology has fostered the creation of new delivery systems for financial services that have dramatically increased convenience and obliterated geographical limitations,2
our research using data on properties in cuyahoga county indicates that in stronger submarkets our performance is similar to the rest of the nation,1
the imminent transition away from paper check clearing makes the green and todd question a live issue right now in the usnotice that i have made no use of the notion of market failure my own working hypothesis is that market failures are largely absent from the payment system,4
we are charged with creating the  monetary conditions to support sustainable noninflationary employment growth,0
in the second quarter of 1980 the current cost of collecting commercial checks was only 3 percent higher than it was in 1977 despite much larger increases since then in prices we pay for labor capital and other inputs,1
us financial institutions must have sufficient powers to adapt to and indeed to be leaders in the continuing evolution of financial markets,2
however  southeastern banks perform especially well when measured according to standards like profitability  and  capitaltoasset ratios  which give  a better  picture  o f relative  strength,2
the extent to which businesses have succeeded in boosting output with fewer labor hours and minimal capital investment over the past two years points up the possibility that a considerable stock of inefficiencies accumulated in the boom years and that this stock is still being worked off,1
for monetary authorities the most fundamental problem of timing is to perceive changes in the business climate quickly enough to take compensatory action,4
the persistence of this lower inflation has bolstered confidence in financial markets dramatically,2
but we learned in the early 1980s  that the resultant tighteningwhile necessarygenerates large losses in  employment,0
it must be applied for and must pass the tests of public benefit that i previously stressed,0
the result is a broadly based economic intelligence systemin timing the changes in monetary policy the fed acts in accordance with its best collective judgment as to the emerging current situation it does not wait until all the business indicators show a downtrend before supplying bank reserves more liberally nor does it wait until inflation is an accomplished fact before limiting credit expansion,2
depending on the terms of the sale originators who sold mortgage loans passed much of the riskincluding the risks of poor underwritingon to investors,2
moreover disclosing or explaining the why of policy actions is obviously complex,4
having proven themselves unable to cobble together with colleagues a working  fiscal policy or to construct a regulatory regime that incentivizes rather than  discourages investment and job creationin other words failed at their own jobthey  simply find it convenient to create a bogeyman out of an entity that does its  job efficiently,3
imagine if you will the consequences if congress were to abandon its wisdom of the past four decades and subject monetary policy to direct political control as some now urge,3
they can and should have the opportunity to do morenot only to promote implementation of international policy initiatives but also to give a clear view of financial stability developments in their respective regions,2
these actions combined with the introduction of  emergency lending facilities to provide liquidity to funding and credit  markets proved successful,2
trends in adult labor force participation are also important,0
going forward the large inventory of unsold houses will likely limit growth of housing starts for some time,0
the response of payees has not been very enthusiastic 10 percent of government civilian personnel elect to receive their pay in this manner 28 percent of military personnel,3
still to be fair there are other potential and perhaps more farreaching implications of the spread of information and communications technology including the role of the internet and ecommerce,1
under normal conditions the fed and most other central banks implement policy by setting a target for a shortterm interest ratethe overnight federal funds rate in the united statesand enforcing that target by buying and selling securities in open capital markets,4
the surcharge attempts to reduce the chances of a global systemically important banks gsibs failure so as to bring the expected impact of the failure of such a firmthat is the expected damage to the system upon its failure discounted by the possibility that it will in fact failmore in line with that of other sizeable firms,2
13likewise in the case of the suggested variable reserve requirements on bank assets the results cannot be outlined in simple terms,2
the fed cant make grants or finance projects its not in our congressional remit,4
it is important for lenders to understand that failure to recognize the profitable opportunities represented by minority enterprises not only harms these firms it harms the lending institutions and ultimately robs the broader economy of growth potential,2
so we have this very difficult task of somehow giving a net distribution back to the banking system setting up a payments schedule and at the same time finding a way to cushion the burden to the treasury so that we do not have a political reaction that shoots down our program,2
they may relate to money supply bank reserves bank credit employment spending the balance of international payments or other economic factors,2
5  mcap also tackled some very difficult issues not directly related to the home purchase process,0
underlying all of this was a marked acceleration in the growth of productivity which permitted higher growth and the virtual absence of price and wage pressures,1
from our vantage point another important concern is the possibility of our citizenry becoming so overly worried about what might happen that there could be created the very type of problem we are working so hard to prevent,0
at some level i really had no idea what i had done or what the consequences would be,4
jerry believes that new analytical tools and sophisticated technologies will allow bankers to meet the need for increased commercial lending despite the challenges brought on by increased competition and macroeconomic uncertainty,1
that depends on whether there are economies of scale in the financial sector and up to what size of firm they applythat is to say it depends in part on why there is a financing premium for large firms,2
after paying a small preferred dividend to the member banks of  our district we turn over our annual profit to the us treasury,3
the high level of our national economy at the present time is largely aje to our increasing productivity resulting from the substitution of capital in the form of equipment facilities and technical knowhow for physical labor,1
by cutting interest rates to offset the negative effects of financial turmoil on aggregate economic activity monetary policy can reduce the likelihood that a financial disruption might set off an adverse feedback loop,2
if the fed and the fdic jointly determine that the revised plan does not remedy identified deficiencies they can require more capital increase liquidity requirements or restrict the growth activities or operations of the firm,2
in 1980 there were 14400 banks in the us today there are only about 8700  a 40 percent decline,2
in some cases even parttime offfarm employment is insufficient to offset his operating losses,1
consumer spending had moved higher in august and the decline in new orders for nondefense capital goods  a key advance indicator of business equipment investment  appeared to be moderating,1
the feds community affairs role is quite separate from its regulatory role and is based on the theory that if cra is to succeed both bankers and community groups must benefit     3  from their alliances and in turn such alliances must be based on mutual interest,0
hence some company executives believe tht if they are going to need more plant capacity they had better get it before construction costs rise further thus bringing on the very malady they dread,1
in a traditional securitization a special purpose vehicle sells securities backed by a loan pool and uses the proceeds to purchase the loans from the bank,2
but regulatory changes have made it more expensive for banks to take large deposits from other financial firms and in some cases banks may be unwilling to accept more cash from a ccp,2
at the same time that those workers face unemployment business firms will be facing a shortage of workers with the skills necessary to meet increasing demands for efficiency and quality,0
but it looks as though a continued increase in participation rates by females will be offset by declining participation rates by males,0
the same productivity shocks have led to difficulties with the instrument rule proposed by john taylor 1993 which requires either a predictable rate of growth of potential output or a predictable natural rate of unemployment,0
to summarize i expect real output to grow  slightly more rapidly in 2011 than in 2010 household deleveraging and bank  asset quality will remain a drag on the recovery,2
in addition most mergers and acquisitions have involved expansion into new markets by the acquiring bank rather than acquisitions of local competitors which has allowed local communities to continue to enjoy a variety of potential providers of banking services despite the industry consolidation8 one unavoidable aspect of consolidation is a loss in the number of bank headquarters offices,2
even at this stage of a recovery the increases in productivity have been strong indicating a potential for a very gradual trend of basic labor costs,1
however the significance of the difference is diminished when the startup costs for banks newly entering the business are taken into account,2
the same logic might lead the central bank to consider purchasing assets other than treasury securities such as corporate bonds or stocks or foreign government bonds,4
the decisionmakers then need to reach a judgment about the probabilities costs and benefits of the various possible outcomes under alternative choices for policy,4
like the board of governors the reserve banks operate with the public interest in mind,0
we can justify collective decisionmaking in most activity during national emergencies on the basis that it is necessary for survival  but during normal conditions the competitive market  through individual rather than collective decisionmaking is a more efficient allocator of resources,4
as for the conduct of monetary policy in hindsight it      may seem surprising that there were concerns at that time about      the impact of the ach,2
until  quite recently the interplay between the private sector and government stimulated the creative forces   technical and  economic  which fostered the extraordinary innovative character of us industry,1
with financial stability risks likely to be more tightly linked to the business cycle than in the past it may make sense to take actions other than tightening monetary policy to temper the financial cycle,2
in 1999 forward rates also rose in the united states in response to   strong economic growth and high levels of resource utilization,1
the government could also help by ensuring that there are no barriers to the sale of us automobiles in japan,3
and the ways in which we account for macroeconomic risk factors in assessing the risks facing individual institutions can be improved here the fed is drawing on its unique multidisciplinary expertise to build new supervisory capabilities,2
and it is essential in helping our banks meet their affirmative obligations to the low and moderateincome communities they serve and to understand what is likely to be most effective in lifting up the lives of people in challenged communities,0
then buyers started to read the final prospectus which included narrative  and statistical disclosure of troublesome loans and loans to real estate investment trusts which had not been in the preliminary prospectus,2
by the same token is anyone really concerned about the roulette player at las vegas who loses the farm,1
the framework is briefly described in the fomcs statement on longerrun goals and monetary policy strategy which was originally released in january 20124  the flexible inflationtargeting framework has served the fomc well and has been effective in promoting our monetary policy goals,4
to be sure topics such as bank affiliations with nonbank financial institutions were for practical reasons more focused on larger banks,2
the bureau of labor statistics estimates that productivity in the nonfarm business sector during 1984 rose a bit over 2 percentmany of the factors economists have identified as contributors to the decline in productivity during the 1973 to 1979 period have reversed themselves,1
i will comment on how i approach monetary policymaking in an uncertain world review the types of uncertainty policymakers and economists need to deal with and provide some recommendations for improving monetary policy communications,4
admittedly a certain degree of standardization in these practices was required because basel ii is a minimum regulatory capital framework intended to apply fairly consistently to a wide range of institutions,2
moreover even though they take place continuously these innovations do not seem to create large amounts of unemployment caused by technological change,0
nonetheless after visiting with community organizations and seeing their work firsthand it is clear to me that the most effective community stabilization approaches look beyond homes and mortgages,0
they may wish to ask for more collateral or ensure that the collateral is less linked to the counterpartys condition or broader market distress,2
the community affairs office at our federal reserve bank here in richmond has a good track record of helping various groups work through community development issues,0
exposure to the arts and culture and experience in serving the community can help support the development of these broader hardertomeasure skills alongside more readily measurable cognitive accomplishments in reading math and science,0
supervision and regulation some people have proposed that the fed get out of the business of examining banks that all banks should be examined by one super agency,2
despite decreases in equity prices that have reduced the ratio of household wealth to income the ratio remains significantly above its pre1995 level,0
to conclude the fomc controls very shortterm interest rates fairly directly,4
the gradual rate hikes at this stage of the economic recovery also reduce the chances that the fed will later need to take a more painful path of steep hikes,4
for example say the  market receives new information about a fundamental inputperhaps it is  the latest employment estimatewhich is expected to result in lower  prices,0
for example in 1967 there were about 1090 establishments in the united states producing leather footwear,1
the results of the november elections clarify which party will control the house and shape in part the national agenda,4
a similar story is told by other data in the table the heaviest burden of monetary restraint through midmarch in both absolute and relative terms had fallen on the largest banks,2
the functioning of the labor market is also extremely important for one thing a labor market that fails to place the right workers in the right jobs will fail to obtain the full benefits of workers skills and aptitudes that create high productivity growth,0
yet we now know that discretion is generally not optimal,4
it should be noted that all of these developments are by no means fully integrated as yet into banking or the broader financial system but5 include widespread bank utilization of certificates of deposit and other money market instruments in order to raise funds the growing reliance of banks on services for a fee to offset increasing customer economization on demand deposit balances the heavy dependency on computer technology both within and between financial institutions the growth and diversification of bank holding companies both in the united states and abroad the development of the eurodollar market and the increasing integration and interdependence of economic and financial systems throughout the world particularly among the highly industrialized nations,2
the issues before the subcommitees are  technically complex complex to the point where the maze of detail can over shadow the public interest considerations associated with a safe efficient and trusted payments mechanism for the effective workings of our financial institutions financial markets and the economy at large,2
some jobs such as construction work require that workers report to different locations,0
spurred by loss of funds by banks and thrifts to such largely unregulated institutions as money market mutual funds congress passed the depository institutions deregulation and monetary control act of 1980 the phaseout of deposit ceiling rates mandated by that act will be completed later this month after which banks and thrifts will be able to pay a competitive rate on all deposits other than demand deposits3 even as government regulation was being expanded the means for circunventing mariy of the regulations were being developed,2
thus even in the unrealistic event that currency demand stabilizes and the fomc shrinks reserves to a minimal amount the balance sheet would still be about twice as big today as it was at the end of 2007 when the great recession was beginning,4
my aim in discussing banking legislation is to emphasize one key point much of what happens in the banking industry in the years ahead will be the result of acts of congress recently passed and presently contemplated,2
this program offers communities the opportunity to design and direct local activities that promote revitalization through job growth and human developmentthe city of baltimore was one of six cities nationwide to be awarded an empowerment zone designation,0
as we continue to move rates up we will have to continue to assess whether monetary policy is accommodative neutral or restrictive,4
regarding farm numbers perhaps the best guess is that the decline in farm employment will continue because of the pervasiveness of laborsaving technological advances but that the rate of decline may not be as great as in the past,1
and repairing damage incurred from the great recession continues to be critical for improving labor force quality for stronger longlasting growth,0
they may however have some validity with respect to the concerns of legislators and bank supervisors concerned about the appropriateness of continued bank participation in ldc lending,2
the prospects for international banking are assessed in section ix,2
those same comments might be applicable to the commercial banking system as well,2
private lending institutions added 54 billion to their farm mortgage portfolios in the past decade,1
but before getting into these weighty matters let me   demystify the federal reserve system and the dallas feds role within that   system,4
banks and thrifts also have formed a growing number of lender consortia to pool resources and share risks while working on community credit needs,0
some regulations are based upon a belief that specialization among institutions or guaranteed local markets are to be encouraged,1
restructuring downsizing market targeting narrower specialization and stringent cost controls will be common themes all in the name of capital,1
despite the unwelcome rise in the unemployment rate that was reported last week the recent incoming data taken as a whole have affected the outlook for economic activity and employment only modestly,0
we are currently purchasing 80 billion per month of treasury securities and 40 billion per month of agency mortgagebacked securities,3
another problem area for banks has been making provisions for and writing off problem loans,2
accounting problems were not on my radar screen when i first became concerned about gse risk,3
ive been telling people that our staff economists at times have made forecasts that overestimate the risks of rising inflation,4
in particular it stated that economic conditions were likely to warrant exceptionally low levels for the federal funds rate at least through mid2013 at its late september meeting the fomc announced additional accommodative action,4
as bank president i have the opportunity and responsibility to represent the district in the feds monetary policy deliberations so i have a keen interest in economic developments here,4
i feel that the only justification for the current credit posture in the united states in the face of continued underemployment and insufficient growth has been the payments situationi am glad to note that my views are shared by the distinguished economist who is generally regarded as the leader of the conservative neoclassical wing of the economic profession,0
market commentary repeatedly cites an implicit government guarantee of gse debt as the rationale for the narrow spread,3
these data all point to the fact that pcas are rapidly becoming a major competitor to banks in supplying nonreal estate credit to farmers,1
the federal  reserve system was created 50 years ago and during the years since has properly been under repeated review by congress private organizations and the system itself,4
the same expertise banks used for oldfashioned loans and their funding is still what they do for derivatives securitizations and credit scoring,2
recently released data from the census bureau for example indicate that    between 1992 and 1997 the number of minorityowned businesses grew more    than four times as fast as the number of us firms overall increasing    from 21 million to about 28 million,1
in conclusion both the economy and banking system are continuing to improve and the nearterm outlook is favorable for both,2
this forecast does not incorporate significant effects coming from the major potential sources of downside risk most prominently the fiscal cliff threat in early 2013 i expect that continued aggressive use of balance sheet monetary tools will be appropriate and justified by economic conditions for some time even if fiscal cliff issues are properly addressed,3
slower labor force growth is critically important because gdp growth is made up of growth in the workforce plus growth in labor productivity,0
the federal reserve offered its  assistance to help complete the fslic examinations as rapidly as possible,2
here in the us the fiscal stimulus from the phasein of the 2001 tax cut package is still in the pipeline and the presidents more recent proposals for additional tax cuts are the subject of ongoing discussion in congress,3
at the policy level i must decide such questions as what level of concentration is best for the banking industry,2
proposed changes to federal reserve discount window operations as you probably know the board of governors recently requested public comment on a proposal to revise the federal reserves discount window programs,4
in the united states the financial regulators have issued guidance to all depository institutions that includes a requirement for them to have public awareness efforts underway to inform their customers of the steps being taken to prepare for the century date change,2
but financially overextended households represent a small fraction of the total economy and at the macroeconomic level financial distress in the household sector seems unlikely to cut off the expansion,0
2440 would expand the truth in lending act advertising provisions to specifically mandate detailed disclosure in any advertisement that promotes credit and charge card accounts,0
over the same period the united states also has experienced a significant decline in manufacturing employment a result of globalization and of changes in technology that have reduced the need for manufacturing workers,1
greater activity in the housing sector boosts demand for construction materials and major appliances and furniture,1
indeed with that process now under way it is likely that our securities holdings are now depressing the term premium on the 10year yield by somewhat less than the 1 percentage point estimate reported for late last year,3
this point is extremely important for it means that saving jobs by restricting imports saves only jobs in the particular protected industry,0
the projection for the national economy as a whole suggests that the outlook for blacks will brighten considerably if they can prepare themselves to take advantage of the emerging openings,0
we who have long lauded competition as one of the most potent of all driving forces are now in the middle of the most portentous competition of all time,2
because americas nonfarm economy grew at such a substantial rate       2  unemployment ended the year a t 53 percent,0
of course our understanding of the empirical links between our measures of expected inflation and actual inflation is sufficiently poor that things could well go awry with this forecast,4
for  example it would seem that the legislative process has superimposed certain specific social goals and objectives on to the bank regulatory process,2
5 within the monetary union it is up to the central monetary authority to provide the nominal anchor just as it was in the freely floating exchange rate systemthe success of any of these regimes in achieving price level stability depends in part on how accurately or appropriately the variable or combination of variables chosen as the nominal anchor signals the need for an adjustment of policies,4
some then suggest that banks should disclose all pastdue  plus renewedandreset loans,2
as bret mentioned in addition to serving  as president of the dallas fed i chair the it oversight committee for the  conference of presidents of the 12 regional banks,4
sometimes the directive was specified directly in terms of the desired course of the monetary aggregates in this case typically subject to an acceptable range for the federal funds rate,4
in either case the difficult communications task would be to explain the role of economic conditions in determining why sometimes you act and other times you dont,4
condition of community banks when i analyze how community banks are faring i always keep in mind that the range of institutions we call community banks is remarkably diverse,0
currently about onethird of the nations public spending on workforce development flows through these boards,3
11 the purpose of this pause is not only to encourage and where necessary enforce a husbanding of resources but also to provide a breathing spell during which both the board and the banking industry can give the most serious thought to ways in which commerciai uanks and bank holding companies should devclop il the future,2
for instance bill collectors here in philadelphia could increase their salary 45 percent from an average of about 38000 to nearly 55000 by becoming a credit counselor  with the added bonus that people will actually want to answer the phone when you call,2
but because a larger proportion of the unemployed  are women or teenagers that often means there is at least one breadwinner in the home who is still working,0
however a growing fraction of these goods are now partially assembled with capitalintensive highvalueadded manufacturing in the rest of emerging asia exported to china where final processing is donetypically with laborintensive lowervalueadded manufacturing and then exported to the united states,1
in other words it wouldnt be practical for a regulator to decide that zero risk was the appropriate measure of financial safety and soundness because banks are in the business of taking risks to leverage their assets,2
so while we can                            applaud policymakers who have tried to shore up social                            security we must be ever mindful that the lions                            share of the total 839 trillion unfunded liability                            problem will remain even if they succeed,3
investors and lenders need to understand that failure    to recognize the profitable opportunities represented by minority enterprises    not only harms these firms it harms the lending institutions as well,1
the redemption or sale of securities would have the effect of reducing the size of the federal reserves balance sheet as well as further reducing the quantity of reserves in the banking system,4
businesses that  are contemplating equipment purchases do not know whether bonus depreciation  will be in place at the time they make these very large purchases,1
the markets for more traditional derivatives such as interest rate swaps and foreign exchange forwards and swaps grew rapidly over the past several years,2
but i think we may be better advised to take the opportunity of this review to examine whether there are approaches that might address more directly the vulnerabilities for the financial system created by large nondeposit shortterm funding dependence at major financial institutions,2
the losers will be the fainthearted who have lifted expectations with rosy projections but have not had the courage to make them happen this is a hardball game and its not fun to play but the winners will be the real leaders of a revitalized industry,1
this latter comparison seems more in order since the average size sls is much closer to the average size of member banks once the money market institutions have been excluded,2
another important development has been the rapid growth of the hedge fund industry and its expanded role in the financial system,2
it is not just bank examiners but bankers who need training in how to do their jobs in modern fast moving internationally exposed economies,2
to address the difficulties presented by the very nature of the risk the designers of operationalrisk measurement frameworks have had to be more innovative take bigger steps into new territory and be more willing to step away from traditionaland comfortably familiartechniques than their counterparts in the market and creditrisk arenas,2
the political factor is one of many reasons why jurisdictions are likely to remain unwilling to cede much authority to global as opposed to international financial institutions,3
indeed when we finalized our leverage requirements for the largest banks staff projected the amount of reserves in the system would decline to 25 billion by year end 202112 the current total of approximately 416 trillion in reserves is about 165 times that amount,2
expectations matter and they play an important role in the conduct of national monetary policy,4
even the districts number one industry food processing  increased only 28 per cent compared with a national average increase of 32 per cent,1
construction in particular has shown very strong growth over the past year although that could slow since pipeline construction has stopped,1
but i see the  committees estimates of future longrun  unemployment as also being consistent with this historical evidence,0
as we have found out especially in times of financial stress there is literally no limit to the inventiveness of the human mind when it comes to devising new methods to get hold of money legal or illegal,2
housing starts had risen to a very high annual rate of 21 million units in the last quarter of 2005 but have since declined sharply falling to a 15 million unit pace by the fall of last year,0
the basis of this concern is readily evident since 1957 the monetary reserves of the us have declined steadily and are declining further this year,2
as you know unlike other countries that conducted stress exercises we took the highly unusual step of publicly reporting the findings of the scap including the capital needs and loss estimates for each of the 19 banks2 this departure from the standard practice of keeping examination information confidential was based on the belief that greater transparency of the process and findings would help restore confidence in us banks at a time of great uncertainty,2
capital exchanges are too  money and  interconnected as we saw this past year to  governments to maintain artificial exchange rates,3
after initial fits and starts the basle supervisors committee embraced the concept of using banks internal models as a basis for a capital requirement for market risk,2
black markets offer few of the benefits of legally sanctioned trade,1
corporations for example often allow employees to selfdirect their investments in pension and other benefit plans whereas employers dictated such decisions twenty years ago,0
that is the shortrun phillips curve appears to have flattened implying a change in the dynamic relationship between inflation and employment5 a flatter phillips curve is in a sense a proverbial doubleedged sword,0
usually consumer sentiment closely mirrors contemporaneous economic conditions and it generally moves closely with the growth in household spending,0
27 nearly half of households studied by the pew charitable trust had not recovered from financial shocks at least six months afterward28 and the federal reserve shed finds that 40 percent of adults report they would have difficulty covering an unexpected expense of 40029 this inability to plan for the future dramatically affects individuals ability to engage in the investments such as cutting back on work hours to pursue education and training and the risktaking that is necessary to improve their financial lives30 access to credit can be an important part of weathering these shocks,0
in addition consumers should receive clear disclosure of the factors that are reflected in the recommendations they receive,0
at the same time measured by employment the average blackowned firm in the industries with the highest projected growth rates are typically less than onetenth as large as its counterpart in the economy as a whole,1
it is hard for me to realize and to accept the foct that i last taked to this group in asheville north carolina at your spring meeting ia 1948some 16 years ago i was then talking on the marshall plan in a setting in which the united states was bending every effort to supply the dolars need8d fur european rsconstruction and when the rest of the free world seemingly was confronted with a chronic dollar shortage,4
this summer we held a series of ask the fed sessions aimed primarily at banking organizations supervised by the federal reserve to provide an overview of the proposals answer questions and receive feedback,2
after all texas is subject to the  same monetary policy as california and the other states of the union,4
october 19 confidence vs suspicion kneejerk  needs more regulationto wit circuit breakers  limits on programmed trading  margin requirements do any restore general confidence do we run danger of exporting ourcapital markets because our operations are too restrictive,2
exports added a full percentage point to real gdp growth in 2006 and 2007 and are likely to make a healthy contribution to growth this year as well,1
i mention this correspondent relationship because it is one area of agribanking that is changing in response to the increased demands for credit by the farmers,1
a collecting bank can soon create an electronic image of a check transmit the image to the paying banks location and then present the paying bank with a paper reproduction or with the electronic image itself,2
presumably lenders assess their borrowers riskiness and calibrate the amount of the appropriate haircut,2
the withholding provision provides  that payers of dividends and interest be required to withhold federal income tax at the rate of 20 per cent,3
in such circumstances the intrusion of government regulation in technology  unchanging and innovation sìuggish the costs  the marketplace  may be  able to achieve politicaììy determined results that  otherwise would be missed,3
this lesson has been absorbed by supervisory authorities around the world as evidenced by our successful efforts to strengthen bank capital and our financial systems,2
at face value fiscal policy may                            not seem a concern for the federal reserve,3
moreover it is increasin0ly common for wage agreements to include more flexible compensation arrangements that will allow implementation of costsaving measures,0
to be clear i think that in most cases monetary policy should not respond to asset prices per se but rather to changes in the outlook for inflation and aggregate demand resulting from asset price movements,2
these skills could be safely applied to activities that are  now prohibitedinsurance and corporate debt underwriting for example,1
more than that trying to rely on it to do so is counterproductive because it takes the focus off of programs and policies that can help to prepare and sustain workers in the modern workforce,0
monetary policy report,4
so in the long run  either bankers or supervisors who try to prevent the process are like old king canute,2
thus starting on dec  12 of last year when the base interest rate was 425 percent we began  expanding our balance sheet by providing access to credit for longer terms to  eligible depository institutions to alleviate funding pressures in the system,4
i frequently hear the opinion that further fed stimulus wont accomplish much,4
what does all this prosperity mean to the average american living here in chicago,0
nevertheless those who had good contacts with producers managed to satisfy most of their demands but at a higher cost through this inefficient means of production and marketing,1
yet another costsaver is the relatively lowpriced labor in the area a result of competition for jobs among new arrivals and the regions tradition of cooperative labor relations,0
let me take a few seconds to talk briefly about the idea that there is a link between unemployment and inflation,0
as i said at the beginning thats the ultimate in workforce development,0
moreover any assessment of the economic outlook and the prospects for inflation must be conditioned on the future of the administrations wage and price controls programa future which is by no means clear at this time,3
recent employment reports indicate that firms also are hesitant about hiring permanent workers,0
in addition to lingering weaknesses in construction consumer demand for durable goods remains poor,1
the cra regulations should be updated in a way that is appropriate for different business models,2
my district is heavily involved in manufacturing which makes the regions economy more cyclical than in other regions,1
if these goals are met private creditors and international organizations such as the imf and the world bank will support these efforts the adjustments can occur smoothly if a moderate amount of additional net lending occurs,2
the basel committee generated two proposals one the liquidity coverage ratio lcr with a 30day timeframe the other the net stable funding ratio nsfr with a oneyear timeframe,2
real output remains below the level of early 1973 and since late last year unemployment has been rising,0
this boom is being sparked by higher receipts from each of the states major products beef cattle potatoes and wheat,1
there is less agreement however on the extent to which workplace regulationsincluding minimum wage laws mandatory severance pay righttowork laws and legislated fringe benefitsare necessary,0
an inappropriate management strategy bad credit policies and a failure to make an accurate judgment of market conditions and the risks in the marketplace all combined to put the bank in deep trouble,2
the second way to solve the policy puzzle of preserving flexibility in setting interest rates while also providing stability in monetary policy is more tactical,4
applying this reasoning to banks one concludes that the own risk is that of particular misfortunes or errors of judgment that may hurt a bank and that quite likely could be guarded against on the basis of actuarial principles,2
i have already emphasized that the most fundamental aspect is that investors quickly begin drawing distinctions between assets with prices depressed for good reason and those depressed due to a generalized flight to quality,2
from these indications its possible that the fiscal 1978 budget will also be lower than expected,3
while we still have many unemployed workers and pressures in unit labor costs have continued to be modest there have been some reports of significant wage increases among higherskilled and professional workers,0
participants in the securitization industrythe biggest component of which is home mortgageshave a share of shadow banking,2
before the outbreak of world war ii the effective interest rate paid on time deposits had fallen to one percent and the proportion of such deposits to total deposits at all member banks had fallen back to around the onefifth level of 1920 with most interest rates low there was little incentive for businesses 3 3 back at the turn of the century commercial banks were not important holders of the publics interestbearing assets either personal or business time and savings deposits then comprised only about oneeighth of total commercial bank deposits,1
and housing markets are above all local phenomenain the private multifamily and commercial fields information about loan terms and lending experience is more limited,0
the national bureau of economic research has dated the recession as having begun in december 2007 but the pace of economic contraction accelerated in the wake of the lehman brothers collapse in september 2008 and the ensuing disruption to global financial markets,2
and the remedies that might emerge from such an analysis could well be more farreaching and more structural in nature than simply requiring a few firms to modify their funding patterns,2
all of the charts depict annual data through 2011 the first graph depicts the evolution of the unemployment rate over timethe fraction of people in the labor force who have looked for a job in the past four weeks,0
more recently president kennedy has appointed three committees to  study laws regulations and practices of the nations financial system,2
with the official opening of this exhibit tomorrow we hope to enhance the connections between the bank and the local communities we serve,0
this exceeded the twelvemonth growth range that the federal open market committee had set one year ear lier as being prudent for m and was high in the range for m2 ,4
in a rapidly expanding economy adequate financial reserves and liquidity seem wasteful,2
hence the downside with using monetary policy  to stimulate employment is that when employment is near its maximum level further  stimulus can lead to unduly high inflation,0
we can learn from the trade adjustment assistance about what programs can effectively help displaced workers,0
computers are being used by banks to render onestatement service to clients showing their whole financial position as known to the bankcomputers are also currently in use for making up and disbursing payrolls for servicing trust accounts for planning travel and purchasing travel tickets for rendering management advisory services for control of inventory for billings for doctors and dentists for preparing income tax returns on the basis of standardized information inputs and to mention just one other service calculating golf handicaps for the local country clubi would like to suggest another possibility which occurred to me on or about april 15 this is that banks could use their data processing equipment to save their customers much time and travail in the preparation of income tax returns by sorting checks according to tax deductible payments made by the client and presenting the client with a set of deductible totals at the end of the year,2
and finally there was the introduction of 6year certificates and individual retirement accounts in 1974 these developments have had a major impact on the maturity distribution of thrift institution liabilities,2
another spur to productivity growth is capital spending and capital expenditures appear to be on the rise,1
that turnaround is evident in consumer goods especially autos business equipment and raw materials and even the production of construction supplies increased last quarter,1
it would  appear now that this perplexing movement toward reduc t i o n of farm numbers has only begun to gather steam,1
    the surge in risk hedging in recent years is a symptom of a much broader issue of change in both domestic and international finance that is a manifestation of changes in the real economy,2
i believe this subject is timely because financial innovations have a major bearing on economic activitynot just on wall street but also on main streets throughout the united states,0
starting about 30 years ago though bank presidents and board members began submitting twiceayear economic forecasts for a year or two ahead that were published and available to the public,4
when the federal government operates at a deficit it means that the government spends more than it takes in through taxation,3
pennolin involved a joint venture agreement to produce and sell sodium chlorate in the southeastern unitedstates between pennsalt chemicals corporation a producer and nationwide distributor of chemicals and chemical products and olin mathieson chemical corporation a producer of chemicals and chemical products with division plants in 15 states,1
in recent months some of the wellknown challenges associated with liquidityrisk management were again revealed to the surprise of some market participants,2
this dashboard allows users to determine a selfsufficiency target a level of takehome pay that will allow a person to cover basic expenses without relying on public assistance,0
on the trade side for example the continued accumulation of foreign claims on the us economy will raise the issue of whether foreign investors will want to hold an everincreasing share of their wealth in the form of us assets,2
to put it mildly historical evidence  suggests that governments are not very good at such micromanagement of  factorylevel operation thats why we have private markets,3
the continued success of many community banks depends on their willingness to engage in strategybased innovationled growth,1
at the analytical level there is the question of what the optimal structure of the financial sector should be,2
m a n y of the financial excesses of the 1980s are in the process of being corrected and the international economic environment is becoming more favorable,2
to that end i propose a tax on businesses granting excess wage increases,3
i suspect that many of these organizations are not intending to immediately launch into fullscale brokerage venture capital or insurance activities but rather are looking to keep their options open and retain flexibility should opportunities present themselves,2
it is too early to tell whether this increase in reservation wages is temporary or permanent,0
one possibility that occurs to me is that we ought to make it possible for wealthy people like you who have money to invest to help him break into farming,1
michael moskow speeches  1999  157  3  but the next phase in banking is going to be even more complex the layout of the course will be less clear as technology paves the way for more and more competitors to enter the financial services industry,2
more of the inputs needed for farm production will come from the nonfarm sector and more of the food processing and preparation chores will be done after commodities leave the farm,1
such a program as this could work hand in hand with appropriate monetary policy for the welfare of agriculture,1
for example while 33 per cent of the total civilian labor force was unemployed last month the rate was 60 per cent for nonwhites,0
many securitizers of mortgagebacked securities and resecuritizers such as cdo managers also in retrospect appear to have been motivated more by issuance and arrangement fees and less by concern for the longerrun performance of these securities,2
along with many other jurisdictions the united states adopted a countercyclical capital buffer ccyb to address the issue,2
i think one answer is that the aims and scope of prudential regulation have been fundamentally redefined since the financial crisis,2
6  chinese growth a source of us export opportunities  ever because gains for the united states as a whole are accompanied by downward pressure on wages of us lowskilled workers as already noted,0
forced downsizing and breakup is an option,2
by focusing on keeping inflation low monetar y policy reduces these distortions and allows the marketplace to allocate resources efficiently,4
budgets of the newer social reulatory agencies accounted for over fourfifths of the regulatory expenditures estimated for fiscal 1980 still that does not lessen the federal reserve s responsibility for arre 1 ior a lin t1e regulatory burden on the f inane ia 1 war ld,2
the second major area of concern in the nearterm outlook and one that perhaps could pose noticeable downside risks is business investment,1
as you all know well community banks are a critical engine of the economy and they play a key role in providing access to credit in communities of all sizesbig small rural and every size in between,0
consequently even though the trade balance will improve only slowly over the next     5 two years the volume of exports imports as wellwill continue to grow,1
for example studies have found that the 17 trillion in purchases of treasury and agency securities under the first lsap program reduced the yield on 10year treasury securities by between 40 and 110 basis points,3
a discretionary safety net with no set boundaries only feeds this cycle by giving market participants reason to believe that new complex arrangements ultimately will be protected,2
likewise when a bank sends a government security to another bank through the fed the federal reserve gives irrevocable credit to that bank for the purchase price of the security,2
rather we were running short of qualified workers to fill job openings,0
in light of these pervasive linkages the repeat sales house price index that bears chips name is one of the most closely watched of all us economic indicators,2
this also appears to be true of the cost structure of a number of firms engaged in ecommerce,1
the unemployment rate climbed to 97 percent in august even though nonfarm payroll jobs had the smallest decline so far this year,0
this forecast is  this is not to say there are  one cause for concern is the surfeit o f o ffic e space in  atlanta  and  elsewhere  in  the  southeast    8    defense spending should help sustain the momentum o f many manufacturing firms,1
as towns lose banks and bankers they also lose important local leaders,2
of course the banks lose something on their assets as money depreciates,2
whether we are in a period of expansion or recession the number of jobs being created and lost at any given time is substantial about 15 percent of total employment,0
additional regulatory uncertainty arises from the doddfrank act requirement for two important regulatory rulemakings that could significantly influence mortgage underwriting as well as the cost and availability of mortgage credit,2
these rates declined by about 25 basis points following the fomcs 50basispoint cut in the federal funds rate target on september 18 another indication of market turmoil was that rates on certificates of deposit cds and eurodollar deposits rose sharply on august 9 on news that the subprime problems were spreading to the broader mortgage market,2
the aggressive provision of reserves by a number of central banks met those demands and rates returned to targeted levels,4
it follows that even if employment is close to the maximum level that is achievable using monetary policy there may well be nonmonetary policy levers that could be used to raise employment still higher,0
that is not the road to restoration of selfgovernment in dc  finally the citizens of the district  including the corporate and nonprofit citizens and citizen groups as well as individuals  have to make clear every way they can that they want both more effective better managed government and a return of power to elected government,3
if it is too cumbersome or expensive to establish a business potential entrepreneurs might decide to forgo their ventures altogether or they will enter the informal sector with only limited access to the legal system and to credit markets,1
firms with less  confidence have less conviction to push through price increases,1
lastly as with all new loan products limiting the scope for unfair deceptive and abusive practices will be important,0
i think in time we will start to think of the end of the 20th century and heading into the 21st century as the dawning of the golden age of capitalism,2
the regulators have taken action to level the international playing field and to equate competitive conditions among nations,2
finally im concerned about growing global protectionist sentiment,3
of the 14000 commercial banks in the united states less than 200 are reporting their financial conditions and the results of their operations in the uniform and comparable manner that has been prescribed for state banks that are subject to those disclosure requirementsthose reporting state banks do include practically every state bank with at least 750 stockholders and consequently those whose stock is most actively traded,2
measuring market and credit risk in banks fortunately progress is being made as banking organizationstypically the largest us and foreign institutionsfind better ways to quantify their risks,2
as i have said before the concerns underlying the volcker rule are simply not an issue at community banks,0
lending to creditworthy borrowers a key objective of the stress assessments and our efforts with smaller institutions has been to restore confidence in the stability of our banking system confidence that was lacking in early 2009 our goal though was to accomplish more than stability for example in the scap by setting reasonably ambitious capital targets we hoped also to hasten the return to a better lending environment,2
5 to state the situation more graphicaljy in 194 fortyfour per cent of the farms in the nation with eross sales in excess of 2500 which we might consider a minimum economic unit prod1ced 91 per cent of our total sales of farm products uhile tlle rernaining 56 per cent including 24 per cent submarginal and 32 per cei1t pnrttine and residential farms produced only 9 per cent of products sajes,1
in this latter category community affairs researchers across the federal reserve system launched a study in 2009 of the planning and early implementation stages of the federal neighborhood stabilization program,0
of course the prescriptions from economic theory dont always translate cleanly into realworld policymaking,4
the federal reserve  cannot directly control the total supply of credit,2
but the housing sector is still under great stress,0
evidence to date of an increase in home purchases by owneroccupiersas opposed to investorsis scarce,0
ive said my piece and hope that from now on the press will refer to me as an unemployment dove but i doubt it,0
the data dont capture those who had to  leave their jobs either for their own health or to take care of loved ones,0
for example immediately after october 6 the  stock market nosedived while rates rose steeply in other financial markets,2
20third the recession is improving the condition of financial markets,2
so systematic policy communicated transparently strengthens accountability and credibility and thus serves to preserve the central banks independence,4
there is reason to believe that changes in the financial environment will result in a relaxation of some of the constraints under which banks and their regulators have been operating,2
it is our goal to ensure that the banking industry and the payments system avoid serious problems as they move into the 21st century,2
we must also find new ways to work effectively across traditional boundaries to achieve the stability we are seeking for the financial industry,2
also rising equity prices tend to stimulate spending as households become wealthier,0
our climate and the availability o f land have lured many people and businesses to the region,1
we commend the commission for recognizing workplace education as an integral component in formulating a national financial education strategy,0
the existing framework served us well by supporting the federal reserves efforts after the gfc first to achieve and then for several years to sustain the operation of the economy at or close to both our statutorily assigned goals of maximum employment and price stability,4
credit made available through financial markets also set a record,2
from the employment trough the economy has added more than 12 million jobs,0
with regard to these and any other issues the bonrd will welcome and give serious consideration to any connnents received during the period provided for public connnent prior to final adoption of the regulation,2
back in the 50s holding companies under georgia law could not cross county lines let alone state lines,2
one way to achieve these goals is to seek better relations between labor and management whether by giving workers an equity stake in their organization through employee stock ownership plans by adopting and adapting some of the collaborative techniques that have worked well in japanese and european companies or by other innovative uniquely american measures,0
moreover in my opinion it would be a mistake to allow the broad principles of federal policy on savings rate ceilings to be determined by what are essentially supervisory questions about the quality of management in the least viable firms in the segment of the thrift industry to compete against market securities,2
liberalized depreciation refundable investment tax credits new aid to areas of high unemployment and continued fiscal restraint will provide a climate for strong growth in private investment,3
the weak demand in the owneroccupied housing market and the relatively high demand in the rental housing market suggest that transitioning some reo properties to rental housing might benefit both markets,0
so for example in europe a number of banks had significant sovereign holdings going into the financial crisis not only because capital requirements were so low but also because high credit spreads made these particularly attractive investments,3
that issue is summarized in the question we hear from the whole spectrum of public opinion from those who hurl it as a hostile challenge to continued freedom of enterprise to the many in business and public life who are searching sincerely and with a sense of urgency for answers what is the social responsibility of business and how should it be met,1
our conversations with financial institutions and disasterrecovery experts indicate that some institutions are not just revamping emergency response and contingency plans to address vulnerabilities experienced during 911 they are considering some fairly significant changes in their operations,2
in late 2014 we stopped the purchases and kept the balance sheet constant by reinvesting the proceeds as they came to maturity,4
if we are to coax out additional gains from being explicit we must pay careful attention to the design of the targeting framework,4
another benefit of stress tests is they help ensure that banks have sufficient capital to continue to provide loans to creditworthy customers during a downturn,2
households appear to have made some progress in deleveraging but many still face elevated debt burdens and reduced access to credit,0
price stability is also critical in promoting financial stability,2
as the automotive industry has found public taste does not stand still,1
concerned as we all are about the economic consequences of inflation there is even greater reason for concern about the impact on our social and political institutions,3
the role of banks in payments innovation the examples i have highlighted so far illustrate payments innovations from fintech firms and banks alike,2
the small business sector t h e im p o rta n c e o f sm a ll b u sin e sse s to o u r e c o n o m y e s p e c ia lly in th e e a rly s ta g e s o f a re c o v e r y c a n n o t b e o v e r s ta te d ,1
in the four  years 18651868 inclusive such loans by individuals      4   1968 1 accounted for more than 90 per cent of the total,0
2  by talking to business leaders at events such as this one and visiting factories and farms here in the midwest ive seen many examples of this phenomenon,1
conclusions earlier i asked you to consider this speech as a report to you on the fomcs performance with respect to its two congressionally mandated objectives,4
on the employment front the number of construction jobs actually increased by about 100 thousand from january 2006 to january 2007 residential construction jobs have remained flat so the increase is attributable to other constructionrelated jobs,0
the bill is not really about an audit in the usual accounting or financial sense of the term since the feds financial statements and indeed its operations in supervision and payment services are already subject to extensive outside audits by the gao the board of governors office of the inspector general and an outside public accounting firm,4
a key factor in economic growth both here and abroad is the longterm process of opening our borders to trade and investment,1
or regulation we can nonetheless reevaluate the need for existing government programs from time to time to determine if they are still warranted,3
forums for discussion of liquidity taking the easiest question the where question first there have been various forums in whieh international liquidity has been either consistently in the center of the stage or always and everpresent in the wings,2
the facility provides loans with maturities of up to five years to investors to help finance their acquisitions of certain abs and cmbs,2
the postcrisis regulatory and supervisory environment the severity of the great recession and its ongoing fallout importantly including its influence on public opinion has heightened the focus on the challenge of avoiding another such crisis,4
the unemployment rate has moved lower this year and registered 55 percent in may,0
unfortunately the intensification of financial turbulence last fall led to further significant deterioration in the economic outlook,2
and i believe that those financial stability board and doddfrank reforms designed to permit the resolution of systemic firms without taxpayer exposure or undue disruption are very promising,2
because capital has grown more slowly than the labor force we are beginning to fall behind in the investments that are essential to providing the jobs for the future,0
i believe that market confidence in continued low inflation has helped drive down the slope of the yield curve by reducing the premium demanded for holding longterm nominal assets,3
on this same issue a concern often expressed is that though glb may provide expanded opportunities for fhcs the advertised fedlite regulatory oversight effectively blocks the socalled twoway street,2
there are no indications in the marketplace that the process of reengineering business operations is slowing although it has been difficult analytically to disentangle the part of the rise in output per hour that is permanent and that which is the consequence of transitory business cycle forces,1
however it was expected in return that the citizens would respect and support the institutions laws and customs that were essential to the survival of a society of this kind,0
onestop banking is more important to the individual customer than it is to the corporation,2
as bob knows from his service on the banks advisory council on small business and labor discussions about current conditions and peoples business plans are important for monetary policymakers,1
no longer having industrial production as its dominant activity it is now a learning city a business meeting center for the nation and the world a corporate headquarters for the midcontinent and a business service city that sells to the broader midwest region to the nation and to global markets,1
with our excellent transportation system it seems more reasonable to move the students to the colleges than to try to put new colleges close to potential students,0
such an increase in private saving propensities and a reduced demand for residential capital should prompt movements in relative prices and other factors that will in turn make room for a larger role for business investment and net exports in overall economic activity,1
but forward guidance remained a central tool of monetary policy,4
during the  6course of 1969 about a dozen states either removed suspended or raised the existing ceilings and at the end of last month another halfdozen states had legislation pending or were planning steps to relax these constraints,2
third the record number though still small of mergers or conversions of s  ls into savings banks during 1970 fourth the regulations issued by the home loan bank board in 1970 governing third party payments by federal savings and loan associations and fifth the enactment last year of the socalled onebank holding company act sweeping under federal reserve jurisdiction some 1100 onebank holding companies controlling a substantial part of total commercial bank assets,2
the data in table 1 offer conclusive evidence that the income differentials traditionally observed between white and negro families seriously understate the differences in economic welfare because they neglect the poorer net asset position of negro families,0
they promoted new social arrangements that addressed the central irony of the industrial revolution namely that this enormous mechanism for economic growth left millions still in poverty,0
clarity requires that policy have rulelike characteristics,4
such efforts help ensure that families at all income levels have an opportunity to enhance their financial future,0
banks do continue to play a central role in credit markets in particular because of the burgeoning market for loan sales banks originate considerably more loans than they keep on their books,2
arguably in the current riskon riskoff environment us financial markets have also experienced the effects of european risk in equity markets,2
in 2013 the collegeeducated worker earned over 80 percent more6 the inescapable conclusion is that we are failing to keep pace with our economys growing demand for skilled workers,0
in other states it was the transition vehicle between a unit banking system and statewide branching,2
600 million for increased public investment in transportation including port improvements required for increased coal exports and maor investments in human capital,3
within the broad loan standards established by statute and by supervisory authorities the individual lender is in a better position to judge the credit standing of his borrowers than governmental authorities he is also frequently able to make a more realistic appraisal of loan collateral,2
but such an approach can extend the proverbial runway for a troubled firm and help avoid repeats of the situation six years ago when policymakers confronted with chaotic financial conditions had little time to react and few available tools other than government liquidity and eventually capital injections,2
wage growth for the most part has been quite slow,0
deficit spending by the federal government can be justified at a time of substantial unemployment,3
so we promote public confidence in this system and improve its efficiency through bank supervision and by our active involvement in the operation of our nations payments system,2
one project that the chicago fed is very proud of is the mortgage credit access partnership which we helped launch in 1996 the goal of mcap is to ensure fair and consistent treatment for all homebuyers in the chicago area regardless of where they choose to live their race ethnicity or gender,0
workers may be offered support ser v ices such as child care counseling and more extensive training after starting to lear n the discipline of a job,0
one is the recent discussion of the prospective us budget deficit and its international repercussions,3
most worrisome of all is the likelihood that pressures will increase for the federal reserve to do something to bring down interest rates13these large internal and external deficits that i have been discussing with you today pose a serious thyeat to the sustainability of the current economic recovery,3
likewise some have blamed past bouts of volatility in fixedincome          markets partly on investors who dynamically hedge the prepayment risk          of mortgagebacked securities,2
an enormous stream of money is constantly passed among financial institutions electronically on the feds wire system known as fedwire,4
finally we are examining the longrun strengths and weaknesses of the clearing and settlement systems for electronic payments,4
they are given but slight aid in learning how to maintain the value of their house and in meeting necessary payments,0
the vault and cash processing areas were no longer adequate for efficient operations and cash delivery facilities could not accommodate the type and number of delivery vehicles which had resulted in armored trucks queued along spring street,2
the challenge ahead for lenders will be to determine how to assess the credit quality of businesses in an uncertain and difficult economic environment,1
competitive performance in banking markets would be optimized by allowing freer entry into markets and de novo entry is of course desirable,2
one candidate is the wave of technological innovation in retail credit delivery which contributed to an expansion of consumer credit including unsecured and mortgage credit,0
but this credit can also be more costly too the highest penalty rate charged to consumers with a major credit card jumped from just over 20 percent in the early 90s to over 40 percent now on some cards issued to risky borrowers,2
the federal reserve also provides financial services to banks thrifts and credit unions,2
these three states had 473 nonpar banks at the end of 1965 or nearly onethird of the total number,2
11a business situation is no better than the quality of decisions that businessmen make dr,1
the remaining banksâ20 percent of the smallest banks operating in 2011âwere acquired by another financial institution,2
again however the share in the past five years is substantially above the 28 percent figure of the decade of the 1950sbanks are not only obtaining a bigger piece of the action than they did in the 1950s they are also putting the funds to profitable uses,2
servicers still report difficulty connecting with troubled borrowers and we have supported efforts to encourage borrowers to contact their lenders or housing counselors,0
welldesigned government policies can also help spur basic science rd and innovation make it easier for people to start up companies and help to ease the transition for households industries and communities being negatively affected by globalization and technological change,3
economists are now largely in agreement that if the central bank does not achieve the goal of price stability no one else can,4
in other words we need to assess whether the federal reserves operational involvement in retail payment services would foster or impede competition and progress as the market for these payment services evolves,2
to add insult to injury the offending banks sometimes borrowed in dollars and lent in their home currencies without hedging believing that their government could and would continue to stabilize exchange rates,2
this includes providing more opportunity for industlial employment and more training for him and his children for such employment,0
the reserve banks often play an important role in forming and supporting multibank community development lending organizations,0
retailers and touristoriented businesses that are thinking ahead will probably expand into the atlanta market prior to 1996 to take advantage of the games,1
banks were unable to respond in kind and  soon found themselves losing depositors,2
in poorer neighborhoods and communities small business development provides everyday retail and commercial services and employment opportunities,0
a quick overview of the o rganization and functions of the federal reserve system,4
as you are well aware technological and financial innovation have become the norm in banking and bank supervision,2
but the fact of the matter is that it is bankers themselves who do the driving the supervisors merely license the drivers and establish the rules of the road which will make it possible for them to get where they are going quickly and safely,2
so by all means i am firmly in the camp for adjusting interbank capital charges,2
there is no discernible relationship between the amount of tax incentive and the relative need for improved productivity performance,3
second growth could remain above trend and the unemployment rate could continue to fall while at the same time inflation fell still further,0
the states largest bank has as little as a 5 per cent market share in two states and over 40 per cent in two others,2
many american  companies have established operations overseas so they can be closer to their markets and take advantage of local opportunities,1
it eliminates the previous reference to a numerical estimate of the longerrun normal unemployment rate and instead defines the statutory maximum level of employment as a broadbased and inclusive goal,0
at times there is a temptation to provide excessive economic  stimulus in the short run and leave the inflationary costs which often are  evident only later for future policymakers to deal with,4
oductivi ty gains unfortunately we also have large segments of relatively fixedincome people who reecire little benefit 2nd then only after considerable lago in some cases their purc1asing power may actually be restricted rather than broadened,0
the effective central bank will pursue such policies regardless of how important it believes the role of monetary credibility to be,4
we do not regard such observations as criticism of our examiners but instead as opportunities to test and possibly adjust our policies to promote overall consistency,4
marketsby reporting market aggregates on positiontaking that would help market participants and policymakers alike monitor the buildup of risk exposures within the financial system,2
and with about 45 per cent of the 1012 millior workers under major contracts covered by costofliving escalators w  11 increases will automatically be paid out as consumer prices increase,0
in many ways i believe the same is true for monetary policy as we continually guard against economic threats,4
but more than that you play a central role in helping students understand how our economy works and how our markets function,0
the fed will continue to carry out its basic function as lender of last resort,4
so we all can succeed 125 years of womens participation in the economy speech delivered at 125 years of women at brown a conference sponsored by brown university providence rhode island may 5,0
households caution is understandable,0
and importantly lower sales of goods and services also reduce the incentives of firms to invest and hire thereby slowing the recovery,1
separately for those central banks that unlike the federal reserve moved to negative interest rates there may be special considerations associated with raising policy rates back into positive territory,4
we can usually spot the first economic imbalances as they develop corporate or personal borrowing that gets out of line for example or excessive commercial real estate speculation,2
our tax committee worked closely with the bar association in the  preparation of the bill and we are hopeful that this legislation will receive the approval of the congress because of the very serious need for clarification in this area,3
and the banking system did its part admirably,2
despite its tradition  2  the fed has had considerable experience in directing credit flows  the main lesson it has drawn from this experience is that the task is distasteful and results have not been outstandingly successful,4
of course based on their consideration of the factors noted above and the results of their stress tests banks may reassess their participation in certain markets and exercise greater caution to account for potential tail risks and better protect themselves in times of marketwide stress,2
in addition stimulus payments and a year of reduced spending might have given workers the financial wherewithal to be more selective about pay working conditions or health risks,0
the chicago fed carries out these activ ities in a fivestate region consisting of most of indiana illinois michigan and wisconsin and all of iowa,4
in contrast banks hold a more diversified mix of liabilities and assets many of which are less sensitive to unexpected changes in interest rates suggesting that banks as a general matter are less prone to interest rate risk,2
in most cases however the states have severely limited the number of potential entrants by selecting regional 5  interstate banking plans,2
in the accounting profession the american institute of certified public accountants in its soc practice section has designated a public oversight board pob,2
also need to consider exogenous factors that are not predictablefor instance what congress might do,3
in addition servicers in the alliance agreed to delay foreclosure proceedings if an alternative approach might allow the homeowners to stay in their home,0
this conference is part of a firstever public review by the federal open market committee of our monetary policy strategy tools and communications,4
the difference is that the gradualists think the impact of drastic action involves socially and politically intolerable stresses to institutions and imposes disproportionate sacrifices on some segments of the cod111unity,0
at the later stages of a long economic expansion recent fiscal actions have had the impact of increasing government debt to gdp and have provided meaningful stimulus to nearterm growth,3
10recent and prospective pattern of business investment these new investment requirements will follow a heavy volume of investment activity by american industry,1
under these conditions its no surprise that credit is no longer available to consumers on the same terms,0
moreover the fed could create a credibility problem for itself if forward guidance is too specific,4
how business investment activity develops in the coming months bears our close attention,1
as a result the federal reserve took action to help forestall this risk including the 50 basis points cut in the target federal funds rate on september 18   recent financial market developmentsit is premature to judge the ultimate effects of our policy actions on financial conditions let alone on macroeconomic performance,2
by 1970  thus the traditonal sources of  banks1 loanable funds demand deposits and securities were not keeping pace with the economys growth,2
there is some evidence suggesting that outside of new york the amount of cds turned in around the midmarch tax date uas particularly large,2
at some point a creditor may balk at extending new loans to a borrower who persists in living beyond his means,0
but given the low level of inflation well contained inflationary expectations and the remaining slack in the economy we believe we can remove the remaining policy accommodation at a pace that is likely to be measured,4
these financial products have contributed importantly to the development of a far more flexible and efficient financial systemboth domestically and internationallythan we had just twenty or thirty years ago,2
it is a  political fact of life that politicians feel that in order to be elected they must promise their constituents more and more benefits,3
more specifically  regulators must be authorized to require institutions to take immediate steps including liquidation when necessary when capital ratios fall below established thresholds,2
over the past halfcentury societies have embraced the protections of the myriad initiatives that have partially substituted government financial guarantees and implied certifications of integrity for business reputation,3
one area of our staffs success                            is with employment data,0
would there or would there not be spending caps on capital budget spending,3
but our  experience last fall and again this past april suggests that we cant even count on that result anymore  that increased money growth leads market participants to push rates up rather than down because of increased fears of future inflation,2
we are simply asking the congress to treat our competitors as we and other corporations are treated,3
the assumption is that banks can fund themselves at lower cost than other financial institutions because the insurance of deposits and access to emergency liquidity insulate them from failurebut whatever advantage is gained in funding cost is at least partially offset by the opportunity cost of the sterilized noninterestbearing reserves member banks must keep at the fed the cost of services provided to depositors by banks acting as paying and collecting agents and the substantial cost of reporting and compliance imposed by regulationunfortunately we do not have a precise quantitative analysis of this much discussed subsidy and the numbers would vary widely from bank to bank depending on the deposit mix and the purchased funds markets which a particular institution might use,2
change and dissatisfaction even the briefest glance at our financial markets and institutions shows rapid transformations in progress,2
and profitability has to be present before businesses will consider expanding investment and recalling laidoff workers,1
much of that growth in international banking took place in the interbank market,2
but what will the budget deal accomplish,3
and consumers were the focus of federal reserve actions as we fought the crisislowering interest rates to stimulate economic activity providing liquidity to markets to maintain credit flows and issuing regulations to improve the quality of credit provided to consumers,2
we had labor unions and  collective bargaining covering a greater percentage of our labor force in the early 1950s but still halted a major postworld war ii inflation with a slower rate of money growth,0
the estimated vulnerability of richmond increased to the point where by 1962 we could no longer risk the postattack capability of our entire communications system by leaving the switching center in richmond,4
the committee stressed that it was at no time concerned with open market rates,2
to the extent savings are increased the potential squeeze on the credit markets can be alleviated,2
thus concern with overcoming the unemployment effects of the 197475 recession may have tended to merge unperceptively into concern with preventing a recession in 1979 or 1980 even though inflation always ranked at the top of federal reserve concerns3and ineffective,0
capping nondeposit liabilities        proposals to place a cap on a banks nondeposit liabilities as a fraction of us gross domestic product gdp have been promoted as more directly responsive to the sources of systemic risk than are proposals to reinstate glasssteagall or to cap the total assets of a bank,2
given the globalization of economic activity and our current concerns about world economic crises it is important to note that small businesses are active participants in our international trade the sba estimates that their exports account for about onethird of the value of export shipments,1
but with the structure of the supply and demand for farm products as it has emerged in the united states this no longer seems to be the casehow then are farmers likely to fare,1
in other words does your bank have the sound answer to your employees question as to the fairness of his or her compensation,2
i reasoned that by following through with another measured step to reduce purchases the committee was strengthening the signal that the process would continue and thus it was reducing policy uncertainty,4
i also believe that the transcript provides a valuable record for scholars and i strongly support the current system of releasing lightly edited transcripts,4
vague concepts such as easier tighter or more  restrictive carry little operational content for monetary management,4
thu s by guiding tho growth of bank credit general monetary policy affects the in centives to spend borrowed funds and also the incentives to save and to lend,2
the greater use of credit models in retail transactions provides a stronger framework to assess risk and ensure that pricing reflects credit quality,2
we also continue to work with organizations that provide counseling about mortgage products to current and potential homeowners,0
market participants do have a sense of the aggregate price level and how they expect it to change over time and these views must be embedded in the value of financial assets,2
with respect to regulatory authority no district reported any problems with overlapping jurisdictions,2
more specifically does communication of inflation objectives lead to increased public support for the central bank,4
thus a stable monetary policysupported by an institutional framework that allows the central bank to pursue a policy independent of fiscal considerations and political pressureseffectively removes an important potential source of high passthrough of exchange rate changes to consumer prices,4
in fact little more than half of those households headed by persons aged 3034 owned a home in 1988 and if the trend toward rising homeoership rates among older age groups holds a substantial number of baby boomers will buy homes in the 1990s,0
actually i do want to help bring down that wall by giving you some of my views on government regulation in general and regulation of banks and other financial institutions in particular,2
i know you have a lot of knowledge and expertise to bring to bear on this issue which helps explain why congress has required the agencies to consult with the states,3
according to  the credit view banks are the key channels of fed influence only because they are important suppliers of credit in financial markets,2
but then ill revert to my more usual form and conclude with some comments on the economy and monetary policy that i hope you will find useful in thinking about where we may be headed in the year 2000but let me start off with a few comments about the new banking law,2
supervisory responsessupervisors too have learned from the recent experience including the need for careful selfassessment and the pwg and the fsf reports offer some helpful recommendations,2
lending institutions can better evaluate the likely profitability of capital projects thus reducing their risk of credit loss,2
on those occasions and in appearances such as this one today the aim is to account for the fomcs policy actions and explain how they are intended to achieve the specific goals that the congress has assigned us,4
this development also leads us  to expect increased competition between banks and nonbank financial insti tutions,2
now then at the end of my remarks let me be    9    quite clear that i do not believe the federal reserve is perfect,4
by the late summer and early fall of 1979 domestic financial markets and foreign exchange markets were in turmoilin view of these developments the federal reserve sought to gain closer control over the money stock and reassure the markets about its resolve to curb inflation,2
they do this by making loans to solvent financial institutions so they can meet their liquidity demands and avoid forced sales of their assets,2
it is not selfevident that a federal law is needed although it may be,3
the fed recognizes that in order to perform our various duties we need to have a good understanding of all of the interrelated challenges facing lowerincome communities as well as more affluent areas,0
minimills thrived however and are playing a key role in the industry  running efficiently with only several hundred persons per plant,0
robust employment growth increased disposable income and fairly healthy household balance sheets should cause consumption to grow this year by 27 percent and it is the consumer who will underpin the economic progress in my forecast,0
more regulation is not the best answer to every problem,2
you should encourage continuous improvement in all aspects including data integrity legal clarity transparent disclosures and internal controls,2
the first three really are alternative perspectives on a single essential principle of prudent monetary policy the importance of leaning against the wind by enforcing procyclical movements in shortterm interest rates,4
interest rates in financial markets like the prices in any markets are determined by the net result of all factors that underlie and influence the supply and demand conditions,2
it would imply a very favorable investment climate in which investors could take full advantage of low interest rates with confidence in price and exchangerate stability with a moderate tax system a moderate degree of regulation and markets free of rigidities imposed by government labor or uncompetitive business practices,2
policymakers consider a wide range of indicators in assessing employment but estimates of maximum employment are subject to substantial uncertainty,0
to the degree that households are driven by fears of payment shocks but are willing to manage their own interest rate risks the traditional fixedrate mortgage may be an expensive method of financing a home,0
in my remarks today i have taken as selfevident that the fomc conducts monetary policy by gradualist principles and have focused on reasons that gradualist policies may help to promote the federal reserves objectives,4
as a result the unemployment rate actually increased and averaged 74 percent during the year,0
in february 2009 the federal banking agenciesled by the federal reservecreated a stress test and required the nations 19 largest bank holding companies to apply it as part of our supervisory capital assessment program scap,2
indeed we call this the effective lower bound on the funds rate or elb,4
given the fact that most  farms are eligible for a limited amount of credit if excessive amounts are used for one purpose leaving  insufficient amounts for other purposes the excess may cause the farm to be inefficient,1
increased diversification under the act should result in healthier banks as risk is spread across different investments lowering the organizations consolidated risk profile,2
since one justification for regulation q ceilings was to restrict the  growth of commercial bank credit the effects may have been intended,2
the evidence that partial expensing is having an effect is not clearcut but my view is that capital spending is probably being influenced by the tax law and that its expiration in january will probably damp outlays in the early part of next year,3
adjudged by one of the three federal bank supervisory agencieswhichever one will have supevisory responsibility for the institution resulting from the merger,2
on inventories patterns in 4 of the past 5 years have been distorted by steel accumulation concentrated some time in tiv first half of the year and by liquidation concentrated in the seconc half,1
for individuals the economic returns to education are substantial as well,0
in the absence of revenue from its rediscounting operations the reserve banks began to purchase government securities as had been allowed in the federal reserve act,3
one is entry into the banking business,2
although these sets of tools differ in important respects they have one aspect in common  they all make use of the asset side of the federal reserves balance sheet,4
communication the fundamental reason that communication is so important is that monetary policy is more appropriately viewed as the path of the policy rate not simply the current rate,4
but the proof of the  and while im sure that each of you  could cite examples of where some new idea or new plant has made a big difference to a particular town this doesnt refute the fact that we have almost no evidence that efforts to shift industry to less crowded regions have had much overall effect,1
trading plummeted or in some cases stopped,1
we would have had to borrow persistently from foreigners to finance these trade deficits,3
this favorable turn of events has doubtless been materially assisted by the recent financial innovations that have afforded lenders the opportunity to become considerably more diversified and borrowers to become far less dependent on specific institutions or markets for funds,2
even after the developments of the past few weeks we see low default spreads low term spreads and low implied volatilities relative to historical norms and many recent leveraged buyout deals have received funding without the usual set of restrictive covenants a practice commonly referred to as convenant lite all of these factors suggest less concern for the possibility that future adverse shocks could cause defaults,2
after the last financial crisis in which banks were front and center steps were taken to shore up the resiliency of the commercial banking system through higher capital levels liquidity requirements and stress testing,2
by the end of this year we will find banks from about onethird o f the states  operating deposittaking offices in at least 40 states,2
it is also a complex task that will require detailed and cose cooperation and coordination among the congress the administration and the federal reserve,3
one simply cannot have a stimulative policy on the one  hand and a restrictive policy on the other hand,4
by stating its intention not to modify the mandateconsistent inflation rate without a clear technical rationale i believe that the fomc would provide a firm nominal anchor that would not differ much in practice from some alternative commitment to a specific numerical inflation objective,4
5 for the longer run deposit insurance is a cheaper way of protecting the depositor than bank equity or subordinated debt,2
and funds available actually and potentially  for mortgage lending remain plentiful,0
it will be a success if gm can earn a market rate of return while supporting its core business of selling automobiles,1
it is true that a good part of this change can be accounted for by demographic factorsnotably lower population growth the aging of the baby boom and the leveling off of participation rates among women,0
labor market data generally provide a better realtime signal of the underlying pace of economic activity2 in addition retail sales surged in april as did consumer confidence in may suggesting that the pause in consumption may have been transitory,0
developments such as digital deposit and lending products regulatory technology solutions and application program interfaces apis have increasingly become more popular in the banking industry,2
employers large and small privately owned or publicly traded will  tell you that despite access to cheap and abundant capital they are hesitant  to make longterm commitments including hiring significant numbers of  permanent workers,1
potential purchasers for example might engage in various activities ranging from assessing risk exposures through stress testing to assessing the enforceability of contracts that define the requirements of investors trustees guarantors and originators,2
when private sector competitors can provide better services at lower costs and do so in ways that enhance the functioning of the payment mechanism we have had no choice but to reduce our presence in the market and we have done so,2
there were few solid business statistics to support the belief of an economic upturn during the early summer,1
after three years of leading the nation in job growth the region has seen a leveling off of employment creation in 1995 however this development is nothing to be alarmed about because the southeast should still enjoy healthy job growth this year,0
well relative  to its counterparts around the world the us central bank is highly  decentralized,4
market uncertainty at the time of a crisis will quickly lead to a deeper and more extensive problem in the worlds financial markets,2
but if government must intervene it should be the responsibility of the fiscal authority,3
this is because we believe that the risks of securities activities can be managed 6  prudently and because organizational forms can be constructed which control the degree of risk to the bank,2
if momentum continues and some of the potholes out there are avoided particularly a political crisis around fiscal decisions growth could accelerate,3
in our march forecasts the median estimate of this longrun unemployment ratewhich is called u by somewas 412 percent9    three possibilities concerning low inflation and low unemployment and their implications for monetary policy  at 41 percent the current unemployment rate is obviously below this longrun level,0
over that period the collegeeducated immigrant population grew from 59 million to 105 million,0
at the same time the tendency of foreign investors to pull their capital out of a country at the same time as has recently been observed in various instances throughout the globe can leave an economy in serious trouble,2
first i will update you on our new partnership for progress program which is designed to foster and support minorityowned and de novo depository institutions,0
increasingly  5we are faced with a blurring of the distinction between money coin currency and demand deposits near money time deposits and short dated money market paper and credit,4
the financial crisis exposed fault lines in the financial system that had to be addressed immediately comprehensively and vigorously,2
but the evidence suggests otherwise us bank lending has been healthy over recent years and profits are strong,2
there was some uncertainty associated with the mechanics of the first rate rise because the federal reserves balance sheet had been greatly expanded by quantitative easing,4
but to my comfort we had a first loud squeal just a few days ago when the federal reserve was accused of making the banks sacrificial goats for the governments sins of aiming one of the most severe blows against bank profits and of having caused the payments deficit simply by having inflated the banks money supplies so much that they had to seek higherincome foreign sources to employ the surplus funds,2
conversely at times of falling commodity prices in world markets countries in balance of payments surplus should strive to increase their imports so as to bolster aggregate world demand,1
we have tested tools for exit but it will be uncharted territory,4
in much of todays                            newly competitive world governments purpose                            in spending is to build an economic infrastructure that                            fosters privatesector production and growth rather                            than transferring spending from one part of society                            to another,3
participating in these markets are welldeveloped financial institutions searching for highyielding loans and zealously competing for customers,2
heretofore farm financing has been a rather scattered and haphazard u1dert 1,1
the new accord2s emphasis on improved risk management should not be interpreted solely as a requirement to determine regulatory capital standards but rather as a foundation for riskmanagement practices that will strengthen the value of the banking franchise,2
indeed some economists estimate that the unemployment rate would be as much as 1½ percent lower were it not for extended unemployment benefits,0
the available us historical data beginning in 1929 show that labor productivity growth is highly volatile,0
each year we have refined elements of both the substance and process of the stress tests,2
the total          output of agricultural products continues to grow but fewer people and          fewer fulltime farms are producing and selling our nations crops and          livestock,1
as i discussed earlier along with implementing policies that support stable prices the federal reserve is also charged with implementing policies that aim toward full employment,0
securities markets also now rely on highly automated records and systems born out of necessity following the paperwork crisis of the 1970s,2
from 1960 through 1964 the opposite condition prevailed banks then had a net excess of reserves,2
it  would be marked by an expansion of our balance sheet beyond its current footings  of 23 trillion through the purchase of additional treasuries or other  securities,4
removing the ceilings will help promote a national savings habit and encourage new deposits in financial institutions,2
neighborhood stabilization efforts can help alleviate some of the costs to neighborhoods of foreclosure and allow local decisions regarding lowvalue and dilapidated properties,0
with the increasing pace of consolidation of financial institutions however there are emerging concerns that the resources and personnel devoted to affordable housing and other community development activities may be decreasing relative to the increasing size of institutions,0
monetary policy        let me conclude with a few words about the current stance of monetary policy,4
this episode however has given us the opportunity to deepen our understanding of the relationship between financial instability and real economic activity and about the effects of an array of policy responses,2
in essence destaine argued aainst the provision of liquidity via reserve currencies or additional conditional liquidity and called for the construction of a new collective reserve unit rigidly tied to gold,2
seventh federal reserve district focus as president of the chicago fed i report on economic conditions in the seventh federal reserve district at the fomc meetings,4
again with marketplace oversight of risks neutralized bank regulators and supervisors must step in to ensure that banks are properly limiting their risk positions,2
the retirees may have accumulated a large stock of retirement savings but the goods and services needed to redeem those savings must be produced by an active workforce assisted by a stock of plant and equipment sufficiently productive to meet the needs both of retirees and of a workforce expecting an everincreasing standard of living,0
it would  be inappropriate for the fomc to raise the target range for the fed funds rate  at any such meeting,4
so what we had in the 1960s was rising government expenditures both for the vietnam war and  for expanding welfare programs,3
in the third district the volume of classi  fied loans of all member banks in 1970 was almost double what it was in 1968     one of the more disturbing aspects of these numbers  is that the  poorer record is at the larger banks where credit analysis would be thought to be the more sophisticated,2
i recognize that this is hardly news to this audience but it may not be widely appreciated beyond itthe feds discount facility exists primarily to assist healthy banks facing temporary liquidity problems,2
business spending for new plant and  equipment is one such area especially in view of the nearcapacity levels of operation evident in at least some industries,1
first the size of the balance sheet is currently expected to peak later in the year and then begin to decrease,4
however it is true that the household debtservice burden has proven helpful in predicting problems with household credit quality such as consumer loan delinquencies so its rise may portend some deterioration in measures of credit quality going forward,0
i take from this experience the lesson that despite their drawbacks much of the time conditional statements from the central bank about the nearterm course of policy can be useful in certain circumstances,4
we believe our policy course will support the resumption of economic growth at a moderateand sustainablepace as inflation continues to wind down,4
senator douglas still intends to push for full disclosure of finance  charges in credit transactions including the simple annual rate but its chances for passage remain dubious,2
the key question they ask is how effectively are these systems measuring and controlling an institutions rapidly changing risk profile,2
financial market turmoil has the potential to make households apprehensive and thereby cause a precautionary pullback in consumer spending,2
to facilitate refinancing for borrowers who are current on their mortgages but whose equity has eroded as home prices have fallen the administrations home affordable refinance program or harp provides streamlined refinancing for low or noequity mortgages if the borrowers meet certain qualifications and if their existing mortgages are already guaranteed by fannie mae or freddie mac,0
this could involve serious shortterm disruptions  in fact it may be that the more costly the disruption the greater the enhancement to safety net credibility,2
i should point out that in implementing the basel capital accord in 1989 federal regulators extended that framework to all banks even though technically the accord is directed toward only internationally active banks,2
the american bankers association recognized the merit of closing the tax gap between savings and loan associations and commercial banks but believed that the curtis bill failed to meet the basic problem that  j   ljkm4  4 is the need for uniformity of tax treatment for both types of institution,2
as i noted earlier some are concerned that financial globalization leads to boomandbust patterns in capital flows and investment especially in emergingmarket nations,2
each member of the committee is by design an independent free agent,4
underpinning a firms stress test is the firms ability to identify and measure risks under normal and stressful conditions and the strength of the firms internal processes and we use the supervisory process to ensure that the firms stress testing practices employ sound methodologies,2
and it would have directed the federal reserve to make such purchases when alternative means cannot effectively be emplyed to permit financial institutions to continue to supply reasonable amounts of funds to the mortgage market during periods of monetary stringency and rapidly rising interest rates,2
in the interim banks and supervisors will have to rely heavily on qualitative validation approaches,2
government  spending will not exactly be a weak spot,3
for example friedmans rule would likely perform poorly in an environment in which the trend rate of growth of monetary velocity underwent a major shift while the taylor rule could perform unsatisfactorily if the assumption about potentialoutput behavior embedded in the rule proved to be badly mistaken,4
the urgency of the deficit problem  just doesnt seem to be confirmed by the shortterm results,3
if this should be the case the plan could be effectuated either by the president under the reorganization act or by the congress through the legislative process,3
as the economy strengthens and firms become convinced that the recovery is sustainable hiring will pick up over the rest of this year and in 2011 but it may take even longer to address the sectoral geographic and skill imbalances that seem to plague the labor markets,0
while the acceleration that many have been forecasting for right around the corner would be welcome that scenario seems less likely than a scenario in which growth continues to be held back by household cautiousness low productivity growth and restrained housing markets,0
i expect the fed   to be just as tough in resisting unwanted upward movements in inflation   as it currently is in resisting undesired declines,4
we act in a sense like a private company selling services like check processing and electronic funds transfer to financial institutions while helping assure that our countrys payment system operates effectively,4
however if the recent pickup in automobile sales is maintained and supplies during the second half are not curtailed by a protracted strike growth in consumer credit should accelerate once more,1
how the fed is organized the federal reserve system consists of a board of governors which sits in washington dc and 12 regional banks located around the country,4
both of these forcesfewer startups and firms fear of firingreduce  the productive capacity of our economy by making it harder for destroyed jobs  to be replaced by created jobs,0
our farm programs designed to correct the alleged illness of income  allocation is an example of such failures,3
still it just seemed awkward to me at least to change the funds rate target in the opposite direction to that indicated only a short time before,4
a  b  e  much o f floridas industrial sector produces electronic and transportation equipment tied to the defense and space programs and the resumption o f serious work on the space shuttle would have positive effects for numerous private industries there,1
a rising proportion of the population is also taking advantage of both general adult education and workrelated instruction,0
we need to pay special attention to the workers affected by such change because this dynamic process helps generate ever higher standards of living,0
the innovations that begin on campuses are diffused to businesses through patents startup companies and consulting arrangements between faculty and industry,1
the success rate has never approached 100 percent except where banks are credibly guaranteed usually by their governments in the currency of their liabilities,2
 over the last two decades we have witnessed what can arguably be called a revolution in retail consumer finance,0
it is based on the hypothesis that even though real wages determine purchasing power workers have an extra aversion to seeing real wages lowered through a reduction in nominal wages,0
and its much harder to raise capital when a us treasury bondthe safest investment on earthoffers a pretty decent return,3
there is little that monetary policy makers can do  about this except jawbone,4
a representative from the basel committee stressed that the latter two are at least as important as the quantitative requirement and may become more so over time,2
video excerpt the fomcs inflation objective should be symmetric  78 seconds  first  i believe the fomc should be clear that its inflation objective is symmetric,4
my remarks today will focus on what federal reserve supervisors see as the key components of a sound and effective compliancerisk management framework,2
this requirement is having the effect of postponing price increases for automobiles metals and other important commodities,1
moreover lower crude oil prices have significantly depressed business investment in the domestic energy sector,1
the size of the balance sheet is larger than weve ever seen and the mbs in particular renders its makeup different than before the crisis,4
while there is a lot of uncertainty about the outlook we believe that the monetar y policy we have put in place will support aggregate demand,1
on the other hand risk management considerations arising from todays unusual circumstances strengthen the case for additional accommodation beyond that called for by simple policy rules and optimal control under the modal outlook,2
targeting on the dollar especially with a downward bias would require giving up the existing moneysupply targets and risk provoking a new burst of inflationmonetary policy now as on many occasions is in the difficult position of having to pursue several targets with only one instrument,4
it seems timely however to say a few words about the new basel capital accord or basel ii,2
in the us for example the major longrun drivers of the structural deficit at the federal level are entitlements such as health care and social security1 thus even after cyclical effects play out many countries will continue to have large structural budget deficits,3
the questionable borrowers were no longer able to borrow at prime and the prime borrowers borrowed at a normal spread over the tbill rate,1
unfortunately once the genie pops out of the bottle it is not easy to put it back in again7prevalent from mid1977 to early 1980 when interest rates do rise to levels that bite moreover the housing market is hit about as hard as it was in earlier periods of restraint,0
because pollcy works wlth a long and varlable lag becomes more  dllflcult  than ever to know whether the federal reserve  lt ls  uslng  a good reclpe or a bad one,4
and i agree that all too often too much of the burden of stabilization policy falls on the central bank,4
the lack of clear ground rules for such intervention can lead market participants to speculate on the next facility the central bank will create or on the next asset class or firm it will rescue,2
as long as these bilateral or regional discussions aim toward the same ultimate objectives as the gatt i feel they can contribute toward greater openness in worldwide trade as well,1
resolution of the issues raised by the public with respect to the measurement of daylight overdrafts particularly the treatment of nonwire transactions such as check and ach payments has taken a good deal of effort and time and has delayed our decision about how the program should be adapted,2
external competition will  continue from sears kroger and other nonfinancial companies as well as from foreign institutions,1
failure of penn central has raised many questions not  to mention eyebrows about credit standards and procedures,4
such purchases and sale provide our most flexible and frequently ued  instrument of monetacy and credit policy,4
and chicagos thriving business service sector  in areas such as advertising management consulting law and research and development  also benefits from the depth of the travel offerings at ohare and midway,1
since most of our new employees are coming to us straight from high school it makes sense for bankers to encourage the teaching of economics in our high schools the bec,0
the construction industry including home building is  l 31 still depressed,1
1  this has been tried on a limited basis but most of these experiments have involved choices among public institutions,3
like any closed auction the idb collects anonymous bids and offers for a specific security in specific amounts during a relatively short window of time generally on the order of a few minutes,2
between 1997 and 2001 the most recent data available employment of us residents by affiliates of foreign companies operating within the united states increased by about 12 million jobs,0
accordingly the federal reserve produces and regularly updates a range of materials including a booklet that lenders are required to provide to potential arm borrowers to help consumers understand arms and other alternative mortgages and we will continue to promote financial education through a variety of partnerships with outside organizations,0
some observers think that monetary policy should remain a bit mysterious,4
dividend omission reduced  14 maturity of issue from longterm to intermediateterm switched from competitive to negotiated biddingand in at least one case arranged alternative longterm bank financing,2
second a lack of experience in familyowned businesses is correlated with minorityowned business failures perhaps reflecting a lack of access to professional financial and social networks where business opportunities are identified and developed,1
like ony other business a farm that is adequately staffed stocked oct equipped and that has the necessary working capital for efficient operation haa a far better earning potential and hence is a better credit risk than tbe one in which too much of the available resources are tied up j_n lauct or plant with the result that operations are handicapped through la0k of eq,1
i am confident the broad treasuries repo rate which the federal reserve bank of new york has proposed publishing in cooperation with the office of financial research is based on a deep and actively traded market and will be highly robust,3
for all member banks this profit ratio was 119 per cent in 1965 and 126 per cent in 1966 also in the table banks are crossclassified by size and the ratio of time to total deposits,2
it destroyed nearly 9 million jobs and its been a long slow slog to recover from it,0
an example of the attitudinal difference toward innovation and enterprise is the american venture capital business,1
first we should recognize the importance of caregiving for young children in the lives of working parents,0
in responding to these challenges it seems to me that the financial policy link between domestic and international determinants may be found in what i have termed the roosa categorical imperative deriving from last fridays per jacobsson lecture by mr roosa namely that on the 0ne hand monetary policy has to be formulated with full regard for all other elements of public policies and objectivesand clearly this includes balance of payments considerations and even international reserve asset creationwhile on the other hand other appropriate public policies cannot ignore the elements of monetary discipline essential to the system,3
last january at the beginning of the first session of the 87th congress no one expected banking legislation to be a major item of consideration,2
people who lack the skills needed to keep up with changes in technology cannot take full advantage of the benefits of the growing sectors of the economy,0
most people are aware that wellinformed consumers can save significant amounts of money when buying bigticket items like cars,0
this in turn has imposed additional credit demands on  banks in rural areas,2
from the fourth quarter  of 2009 through the second quarter of 2010 the change in the pce personal  consumption expenditures price level was just over 05 percent which works  out to an annual rate of just over 1 percent,0
new york was given a permanent seat,4
some models suggest that when you are at the zero lower bound it can be desirable or optimal to indicate that future policy rates will be kept lower for longer than might otherwise be the case,4
smaller banks in particular over the last three months seem to have been doing quite well in competing for time deposits,2
although opec production quotas have been a significant factor in price determination for a third of a century the story since 1973 has been as much about the power of markets as it has been about power over markets,2
unemployment dropped to 56 percent in march its lowest point in eight years and i expect it to hover between 55 and 6 percent through the end o f the year,0
personal savings insurance pension funds all become inadequate,0
regardless of the precise mix of factors that explains the decline in interest rates the associated runup in housing values has left households with a substantial pool of available home equity,0
much of the recent debate however has focused on the opacity of hedge funds to regulatory authorities and to the markets generally which is viewed by some as an important source of liquidity risk,2
combined with a primeage labor force participation rate that while rising is still below its precrisis level low wage growth may suggest that some residual slack may yet remain in labor markets,0
the system therefore is encouraging the expansion of local area clearing arrangements,0
these rebates are frequently rough esti mates of the previously paid taxes and there is some suspicion that the amount of the rebate is larger than the previously paid taxes thus providing a partially hidden subsidy to exports,3
there are good arguments for full funding of education by the state,3
the committee also left the target range for the federal funds rate unchanged at 0 to 14 percent and it expects it will be appropriate to maintain this target range until labor market conditions have reached levels that are consistent with the committees assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time,0
these flows also help even out differences in wage and unemployment rates between states,0
positive news is coming from the oil and gas industry especially here in louisiana,1
fourth the historically strong labor market did not trigger a significant rise in inflation,0
as the lender of last resort the fmha has the most troubled loan portfolio of all lenders,3
in the extreme i suppose a central bank could   run a marcel marceau monetary policy allowing its actions to convey   all its intended meaning,4
in 1992 they helped win passage of an amendment to the federal reserve act that enabled us to move forward on this project,4
i think what you can glean from this little history is that the postfomc statement has evolved into anything but an afterthought,4
14 banks have expressed understandable concern regarding the variation they see in evaluations,2
the major reason of course is the unprecendented  bulge in boeings order book for civilian aircraft whose effects will be felt on both sides of the cascades for years to come,1
2    the role of regulation        new regulation may not always be popular but when crafted appropriately it can effectively alter the actions of those financial institutions that follow lowroad business models,2
we are seeing service providers in a variety of industries leverage technology to engage with their customersâfrom education to retail shopping to fitness training and beyond,1
we will also learn more about the impact of our regulatory capital regime on securitization activities as we evaluate the responses to our proposed changes to the regulatory capital guidelines,2
but that precious grant of independence brings with it a special obligation to be open and transparent welcoming scrutiny by the public and their elected representatives in congress,3
federal agency debt and mortgagebacked securities issued or guaranteed by the federal agencies also could be held as part of a wider range of private debt,3
this in turn suggests that the rate of return on capital should be sufficiently attractive to foster new investment once this stock adjustment is complete,1
a clearing center will accept from participating banks in its clearing region all checks written on other participating banks in the region,2
on one side of the debate there are those who point out the potential benefits of allowing banks to be affiliated with commercial firms,2
business and labor contacts throughout the cleveland federal reserve district across a variety of industries have been reporting to us for quite some time that it is very difficult to find workers across all skill levels,1
banks are not only obtaining a bigger piece of the action than they did in the 1950s they are also putting the funds to profitable uses,2
further we seem to be developing a growing infatuation with the exercise of power to impede the operation of free markets by constantly surfacing new ideas and programs for controls which usually have ended up accomplishing exactly the opposite of what they were proposed to do,3
though profit margins were falling and the cost of external funds was rising to astonishing levels the upward surge of investment in business fixed capital continued,1
in particular as the operator of the fedwire funds and securities transfer system the federal reserve is actively pursuing operational responses to help ensure that the mechanisms and services are in place to support the safe and effective exchange of largevalue transactions,4
if we provide the appropriate actions for overall  stability market forces will assure that individual sectors are treated equitably in the absence of restrictions in a competitive enterprise economy,2
the bottom line on the market is that the current slack in commercial real estate and highbracket residential pieces simply doesnt exist in low and moderate income brackets,0
subsequent research has largely supported brainardâs conclusions and highlighted a corollary to it monetary policy should not respond too strongly to any one economic indicator as the relationship between that indicator and the goals of policyprice stability and full employmentoften differs across alternative models in important ways,4
increased communication also was a critical element,4
waiting too long increases risks to financial stability and raises the chance that we would have to move more aggressively in the future which poses its own set of risks to the outlook,2
more generally the vital objectivity provided by the armslength creditorborrower relationship was more the exception than the rule,2
for example the federal reserves comprehensive capital analysis and review ccar process the descendant of the bank stress tests of 2009 requires not only that large financial institutions have sufficient capital to weather extreme shocks but also that they demonstrate that their internal riskmanagement systems are effective9 in addition the results of the stresstest portion of ccar are publicly disclosed providing investors and analysts information they need to assess banks financial strength,2
we need strong community banks because they help support strong communities,0
conclusion to sum up ive noted that college graduates earn significantly more than people who have not graduated from college and they also tend to fare better during economic downturns,0
in conclusion it is very interesting to me and very surprising that on the 200th anniversary of our constitution and in the 74th year o f our federal reserve system we are having constitutional challenges to the structure of the federal reserve system,4
but the balance sheet will also likely be considerably smaller than it is today,4
once  a banker gets interested in a particular bill and writes to his elected representatives he tends to follow other legislation more closely,2
i remember setting up what we called the war room at the atlanta fed,4
since the war the united states has been filling domestic demand that had built up from the depression and through world war ii,1
line managers must determine the acceptable level of risk in their line of business and must assure themselves that they are getting an appropriate return for this risk and that adequate capital is being maintained,1
the economic  development act now law comprehends just such regional development commissions,3
business leaders have not been ready to place those kinds of bets,1
back then interstate branching restrictions limited                            banks ability to diversify geographically,2
output per worker has increased faster on average in manufacturing than in the overall economy,1
by working with over 100 partner organizations from the public and private sectors mcap has made meaningful steps toward ensuring that financially and otherwise qualified individuals not be denied home ownership,0
in the 1970s w e had what some call a baby bust a dramatic slowdown in the birthrate that is reducing the number of entry level workers in the 1990s,0
why briefly is money a government responsibility,3
first when the price stability objective is formulated in terms of an acceptable range of inflation outcomes the policy implications may be difficult to interpret,4
as the emergency passes we can undo those actions and get the balance sheet down to something close to its prepandemic trend,4
finally mention should be made of the recent introduction of book entry procedures as a substitute for the issuance and safekeeping of government securities held by the federal reserve,3
they argue that in some cases excessive regulation and fees might be creating undue burdens on capital investment lending and the formation and growth of small business,1
these younger generations are often seeking a rural lifestyle and a deeper connection to a smaller communityââa community where they can have a lasting impact,0
the new disclosure requirements will ensure that as the marketplace develops and changes interested parties will be able to conduct more efficient fair lending reviews,0
well relative to its counterparts around the world the us  central bank is highly decentralized,4
i assume that many of you saw the segment of cbs 60 minutes show which showed unemployed workers from michigan vacationing in florida and drawing unemployment compensation while they were enjoying a very pleasant sojourn in the sun,0
and more growth in nominal gnp in the short run typically means both more real growth and higher inflationthe posture of fiscal policy embodied in current law poses a very serious future threat to the economy and to financial markets a subject to which i will return briefly later,3
this change in operating procedure did not of course mean that money and capital market developments would be disregarded,2
at the chicago fed weve sharpened our focus  on customers and on stakeholders  related to all of our activities,4
banks now have the reputation of treating customers information in a secure manner but this could be jeopardized in the move to ebanking as some recent episodes suggest,2
first when the fomc changes the level of stimulus our actions tend to push inflationthat is the rate of growth of pricesand employment in the same direction,0
government actions which affect the economy are often taken in response to notions and prejudices of the voters therefore economic illiteracy becomes a serious factor in the progressor lack of itof our nation,3
it is not a question of whether we issue government securities here or abroad in dollars or in foreign currencies,3
this increased transparency about the framework of policy has aided the public in forming policy expectations reduced uncertainty and made policy more effective,4
put simply the criterion for raising the ccyb above its minimum value of zero is that financial risks are assessed to be in the upper onethird of their historical distribution,2
a firm is liquid if  it is able to raise enough fundseither by borrowing or by selling assetsto  pay its current costs,1
highways airports harbors utility distribution systems railways water and sewer systems and communications networks are examples of projects that would be considered infrastructure investment,3
how can policymakers credibly commit to deviate from something they have never committed to in the first place,4
talking to employers and job seekers and educators just resonates more than a line on a graph,0
other structural factors may also be weighing on the labor market and retarding the return to full employment,0
a further concern which grows out of our responsibilities to the public is competition,0
here are a few other questions that researchers could usefully address  first how should monetary policy deal with increases in commodity prices that are not only large but potentially persistent,4
the assumption is that banks can fund themselves at lower cost than other financial institutions because the insurance of deposits and access to emergency liquidity insulate them from failure,2
at the same time since  its primary purpose was a public one it was made responsible to the congress,3
for the ninth time in us history we have experienced a  doubling of the market indexes corporate borrowing rates are at the lowest  levels on record including those for cccrated credits that are just north of  default,1
if funding becomes scarce banks become less willing to extend credit,2
the least frequently used instrument for affecting bank reserve positions,2
that have  achieved  as researchers the best  have  records  in  controlling inflation are typically those with independent central banks like germany switzerland or the united states,4
under some circumstances a fund might respond by rapidly selling assets with resulting contagion effects on other holders of similar assets and to the degree they had not already been subject to redemption pressures other asset management vehicles holding those assets,2
these practices led to significant losses in prior cre credit downturns,2
failure rates for the branching banks that existed were generally much lower motivating some policymakers to call for liberalized branching as a means of diversifying individual bank portfolios and strengthening the banking systema number of states did liberalize their branching laws between 1929 and 1939 further in 1932 senator carter glass who as you know was one of the founding fathers of the federal reserve proposed enhanced branching powers for national banks to allow both statewide and limited interstate branching,2
by the same token developing nations must play by the rules o f the game    and allow the us to reap the benefits o f our present comparative advantage in generating ideas for new products and in providing high quality services,1
however the committee itself consists only  of the governors the president of the federal reserve bank of new york and a  rotating group of four other presidents,4
there are indications that the slowing domestic demand is beginning to curb imports a tendency which should persist in the near term unless higher oil import prices put that goal out of reach again,1
when some prices were artificially depressed below profitable levels firms either shifted their product mix where possible to items which were more profitable under the circumstances or they reduced the scale of their operations in an attempt to minimize losses,2
heres how these stories might sound if they were boiled down into one version weve got a vibrant economy with strong job growth and no measurable increase in inflation,0
but i also believe that such a perspective is essential for understanding the longrun evolution of the banking industry which has been both shaped by the regulatory environment and has in turn shaped that environment,2
many were concerned that if the federal reserve withdrew from these services it would result in shortterm service disruptions with few longterm benefits,4
third statutory authority for supervisors to intervene in a troubled bank before it becomes brain dedd or capital insolvent,2
we believe that the adjustments under development strike the right balance of advancing transparency while maintaining incentives for firms to think critically about their own risks,2
initially the secretary of the treasury and the comptroller of the currency sat on the board they were removed when the current structure of the federal open market committee fomc was introduced with the banking act of 1935 the act also extended the terms of board members from 10 years to 14 years the long staggered terms of board members have also served as a brake on political influence,4
wage adjustments occur too infrequently to be consistent with flexible real wages in a world where microeconomic shocks continuously alter the relative positions of particular UFB01rms industries or occupations,0
return to text 2 federal deposit insurance corporation 2006 fdic solicits comments on improvements to determining insured deposits at large banks press release 1112006 december 5 httpwwwfdicgovnewsnewspress2006indexhtml,2
one cincinnati agency partners for a competitive workforce is a leader in tracking its results and sharing information with researchers30 research could help identify whether certain sectors like health care or hightech manufacturing where qualified workers are in short supply are more amenable to these kinds of programs or whether such programs can be replicated across multiple industries,1
in moving to an interstate environment we should be concerned with the long term impact of financial innovation,2
these surveys also show that students from poor families are more likely to drop out and drop out sooner than students from wealthier families,0
5  the repeated bailouts of private financial intermediaries have the effect of reducing private banks incentives to allocate funds effectively among competing financial endeavors,2
the requirement of such a tax would materially strengthen the states resolve to put whatever pressure is needed on the troubled municipality to work its way toward a balanced budget,3
given conditions expected at the start of 1972 a 6 per cent growth in real output would translate roughly into a 512 to 534 per cent average rate of unemployment for the year,0
long term a smaller deficit will be a major plus because the government will be borrowing less,3
in manufacturing both labor productivity and total factor productivity have been growing rapidly for several years,1
hoiter of our city and the others of the citizens league who with their fellows in other states agitated for     2  the organization of the federal reserve system  reflected their determina tion to devise a central hanking system that would at once be responsive to local or regional pressures but with the elasticity of a national system,0
one might for example utilize these data to  identify low income areas or declining income areas,0
the recent lifting of the previous ceiling helps such banks to woo the saver to reward 2 2 further mortgage and other longtenn lending,2
broader economic developments can also create risks to financial stability,2
this was especially the case for women with very young children despite being only 10 percent of the prepandemic workforce they accounted for nearly 25 percent of the covid19 employment decline2 we have made progress since last april,0
it becomes necessary therefore to use some technique for surrmarizing the extent and character of state and local expenditures and the burden of their taxation,3
to put this number in perspective consider that the highest unemployment rate suffered by collegeeducated americans in the recent recession is similar to the lowest unemployment rates for the overall population seen in the past four decades,0
strategy regulation and technology 40th annual conference on bank structure and competition chicago illinois may 6 2004    welcoming remarks this year is a true milestone for the conference it marks the 40th time that bankers bank regulators and academic experts have convened in chicago to debate and discuss issues of importance to the banking industry the financial community and the economy in general,2
affordable housing and the cra i want to briefly connect the dots between the high priority we put on strengthening the cra and the pressing challenge of affordable housing that is a key focus of the work that you all do,0
in january as you know the unemployment rate actually rose 02 percent,0
moreover in at least some cases uncertainty is increased by the difficulty of estimating with any precision the extent of potential liability of members to the ccp thereby complicating both their recovery planning and efforts by the official sector to assess systemwide capital and liquidity availability in adverse scenarios,2
in fact the fomc has been attempting such a procedure for  over two years now,4
the council thought that even after taking account of both existing income taxes and the proposed surtax disposable personal income would increase by approximately 35 billion and the savings rate which rose from 59 per cent in 1966 to 71 per cent in 1967 would remain essentially unchanged,0
obviously no country can go on indef  initely paying out its own reserves nor can a country go on indefinitely borrowing reserves,3
that is why banks invest heavily in credit analysis credit scoring and loan workout departments,2
many consumers have impaired credit coming out of this cycle because they were unable to pay due either to poor underwriting or loss of income,0
d so were likely to see some continued strength in these sectors but not large increases from 1997  d overall i dont think consumers are tapped out,0
242  michael moskow speeches  1999  2  in our role as a bank regulator the fed is making sure that examiners are helping bankers better assess the risks inherent in some farm portfolios today,2
it reflects a growing recognition by americans in every walk of life that inflation is the most serious economic problem we face that there are no easy solutions to the problem and that ending inflation will entail 7 7 one area in which no progress at all has been made is in reducing the rise in unit costs of production,1
as a practical matter our choices will be severely constrained by the kind of federal deposlt insurance system we    choose,4
if size is in fact a competitive advantage in the global market the partially completed state of deregulation in this country acts to the     1 0  detriment of our banks,2
from the largest most complex institutions to smaller banks serving the needs of their local communities our nations banking system has thrived amid intense competition and has adjusted to a rapidly changing financial and technological environment,2
the federal reserve recognizes the importance of creating infrastructures that support information resources and networks,4
though such actions probably improved the costefficiency ratios of banks and helped them meet earnings expectations they also could if not done carefully increase the likelihood that new weaknesses will appear,2
by ensuring that every small business owner has equal access to credit and business opportunities we will promote continued and widespread prosperity within our local and national economies,1
called insights for bank directors this free online resource provides a comprehensive look at evaluating bank financial performance and methods for managing the risks to a banks portfolio,2
although in recent years the proportion of our labor force made up of those with at least some college education has continued to grow we appear nonetheless to be graduating too few skilled workers to address the apparent imbalance between the supply of such workers and the burgeoning demand for them,0
we are hopeful that congress will in its legislative response to the crisis include a resolution mechanism and an extension of regulation to all systemically important financial institutions,3
return to text 7 support provided by the official international financial community also helped mute global market disruptions during these eme crises,2
these are some of the circumstances that make the american brand of inflation particularly resistant to efforts to reduce it but i believe that these efforts are beginning to bear fruitfinally the government has mandated inflation in so many ways that to single out only a few of them would understate the gravity of the situation33to remove the drug causes withdrawal pains and unfortunately there is no methadone for inflation,3
for example growth in sectors such as green industries and advanced manufacturing is creating jobs but these jobs may demand different skills,2
housing will probably show further gains  in view o f the lower interest rates we are experiencing,0
household spending rose at more than a 3½ percent annual rate in the first three months of this year,0
although i generally favor making policy decisions at our regularly scheduled meeting we must remain flexible and be prepared to respond quickly and firmly to developments that deviate significantly from our expectations,4
in january and february of 1971 interior issued a preliminary impact statement and held public hearings while in july the pipeline company submitted a 29volume descrip tion of the project with its environmental safeguards,1
bank supervisors today focus a lot of attention on those business activities that pose the greatest risk to a banking organization,2
with corporate debt the united states has not faced a massive credit boom like that experienced with residential mortgages before the recent crisis,1
indeed the consumer financial services laws implemented by the federal reserve contain a number of substantive protections reflecting carefully considered legislative judgments that certain practices should be restricted or prohibited,0
a case in point would be  merril 1lynchs cash management account which offers a customer securities trading and safekeeping an interestpaying money market mutual fund with checking privileges and a charge card with a line of credit,2
we plan to publish a consultative paper in may and deliver a final set of targets to the g20 in october,4
american labor has reaped the rewards in the form of an unemployment rate of only 56 percent and the creation of over 15 million new jobs in the current expansion,0
a recent demonstration of the versatility of the ach is the program that began two weeks ago with the banking industrys selection of the ach as the mechanism for clearing truncated checks in the abas check safekeeping test,2
the cobb center does much to expand the horizons of our business community by hosting these gatherings of people who are working to make atlanta a truly international city,1
innovations in money regimes our view is that people choose to use as money those devices that economize best on the use of other real resources in gathering information and conducting transactions and that highconfidence moneys drive lowconfidence moneys out of common usage,4
regulators themselves are also subject to incentive problems,4
a second  set of programs targets the availability of credit to states and  municipalities,0
this proposal if adopted would not vest in the federal banking commission any new powers over the banking industry but only those that are now exercised by one or more of the three existing federal agencies,2
at the same time however it does suggest that just because a particular activity can be classified as financial in nature it does not necessarily follow that such activity should be fair game for banking organizations,2
i expect continued robust job creation accompanied by growing wages,0
on april 3 the fsoc issued a final rule and interpretive guidance implementing the criteria and process it will use to designate nonbank financial firms as systemically important2 once designated these firms would be subject to consolidated supervision by the federal reserve and would be required to satisfy enhanced prudential standards established by the federal reserve under title i of doddfrank,1
7 how successful we have been must be for others to judge and of course tine 111 surely tell,4
when refinancing activity eventually  shifts down the fed could soon be buying up to 100 percent of mbs issuance if  the current purchase program continues,2
you will recall that the consumer boom of 1955 was followed by an expansion of inventories in every consumerdurables industry during 1956 even though the sale of automobiles declined sharplythis industry a mighty force in the economy appeared to have overextended itself and to have slowed down for a while,1
that means providing students with both the desire and the tools to continue their education,0
there have been strong public pressures on governments to attempt through regulatory action to return us to some semblance of prior relationships which perhaps nostalgically appear more idyllic,3
moreover holding company units do not compete with each other except perhaps in a controlled manner,2
now                            i have the responsibility to apply what i have learned                            over the years in a different contextthe making                            of monetary policy,4
foregoing the cost reductions would mean that all the firms jobs in the united states would be placed at a much higher risk,0
although it was painful these excesses in the construction and retailing industries have been reduced,1
that the prescription often endorsed by the federal reserve of bringing down the rate of growth of monetary aggregates gradually is the right one,4
i am a cautious central banker,4
yet even if you accept this argument it is not clear that monetary policy is the appropriate policy tool to address the problem,4
as long as only one bank was involved the restrictions of the bank holding com pany act did not apply,2
if we do not want to deal with these extremely damaging distortions directly we should at least cut personal tax ratesbut can we afford a tax cut that would further enlarge the government deficit,3
however layoffs diminished noticeably in january and employment turned up last month,0
but third i believe some of the protections provided or sought for small independent banks are misdesigned or have been rendered obsolete by the onrush of events and consequently our communities are not realizing all the benefits which they could and should enjoy,0
in doing so ill note what i see as important differences between monetary and credit policy and ill offer my thoughts on the feds role in the extension of government credit,3
we produce very little  military materiel,1
in this sense deregulation means better allocation of resources more competition and as a result more output and faster growthbut of course there have been other and more mundane driving forces,3
banks themselves deserve much of the credit for their strong capital positions but  the us credit markets is the trauma over,2
such an approach to policy can be highly destabilizing creating added volatility for financial markets and the economy,2
when funds flow into ultimate particular uses however they are  beyond central bank c ontrol0  nevertheless the chain of reaction between policy  action and response in the ultimate objectives exists and can be seen,4
the committee has always devoted a significant amount of time to discussing the economic outlook and has provided some information about its outlook to the public since 1979 as part of its ongoing efforts to improve transparency the committee increased the frequency and content of its published economic projections in october 2007 each fomc participant now submits a multiyear projection for national output unemployment and inflation once each quarter,4
furthermore there are some very important fundamentals that should continue to support housing demand,0
the full cost of the farm adjustment process  however  is still to be  extracted  and part of that  imagined,1
in addition to an effective system of internal controls you should look to your internal auditor and your cpa firm who are in a strategic position to render you assistance in your evaluation of procedures policies and objectives which lead to high quality assets,2
the multifamily housing sector has shown more strength which may represent a longerrun shift from owning to renting in the aftermath of the bursting of the housing bubble and tighter mortgage credit conditions,0
perhaps there also will be some additional release of production for export in those sectors of the machinery industry r1here capacity has been too tight to take full advantage of buoyant foreign demand,1
while much is uncertain about this unprecedented policy unwinding there are good reasons to think that the effects of a gradual and predictable ramping down of the balance sheet will be smaller than the effects measured as the balance sheet expanded,4
13if the federal reserve pursues a disciplined course of monetary policy in 1934 as i believe it will serious conflict is threatened with the increasingly stimulative fiscal policy embodied in current law,3
an allout trade war seems unlikely today but a series of smaller barriers inflicting economic costs on a trading partner has the possibility of inflicting harm far beyond the original target,1
in the banking supervision and regulation arena the fed can work to support an efficient and sound banking system,2
under this bill representative curtis who is himself a director of a savings and loan association proposes to reduce the ceiling on the savings and loans 9 deductible reserves by in effect making retained earnings of such an association taxable when the surplus reserves instead of the present 12 of withdrawable s his bill also proposed to limit the maximum amount of deductible  and undivided profits equal accounts,2
integration in each of these areas has been facilitated by rapid advances in telecommunications and information technologies and by an international policy environment that emphasizes trade liberalization privatization and deregulation of financial markets,2
as unemployment rose and the housing and automotive industries sagged there were temptations for strong government stimulus actions,3
this phase i should point out is being carried out  under the bank  holding company a ct with the grudging approval o f the federal reserve board,2
after all these years the fed may finally be learning how to conduct monetary policy,4
however the committee itself consists only of the governors  the president of the federal reserve bank of new york and a rotating group of four  other presidents,4
certainly repricing of bank liabilities seems to be approaching completion but asset yields will continue to adjust downward as assets reprice or cash flow is reinvested at lower yields,2
2  federal reserve holdings of securities include only those securities included in the national debt,3
it is not unusual for such  uninsuredunsecured liabilities to account for well over half the liabilities  of tbtf institutions,2
a key issue in the international debate about the ics is whether products capital markets and laws vary so much by country or region that a single unified methodology cannot measure risk accurately,2
new car sales have also been more robust than in the united states as a whole,1
the 1980 total included borrowings to finance  the unified budget d e ficit and the deficits of offbudget agencies plus borrowings to finance the a ctivities of federallysponsored enterprises and federallyguaranteed mortgage pools,3
this lowers the risk premia built into mortgage rates,2
the federal reserve recently became a member of the ngfs which is sharing research and identifying best practices to improve the financial systems resilience to climaterelated risks,2
decentralization is fundamental to the culture of the federal reserve system and i have been impressed by how beneficial it is for obtaining intelligence about banking financial markets and the macro and micro economy,4
in the freeman model the central bank acquires the private payment liabilities that give rise to the daylight demand for money while the sweeps proposal is agnostic on the debt used in the overnight reverse repurchase agreements although us treasury securities are the natural candidate given the existing fed bookentry securities service,4
the federal reserve is in continuing conversations with other agencies on approaches to these issues,4
we are able to do this in large part  through our community development efforts to better understand the needs and  issues of low and moderateincome communities throughout our district,0
therefore to engage in these latter businesses a company would have to be certified as a financial holding companyeverything ive mentioned so far refers to consolidation in the financial sector of the economy,2
proponents of this view contend that speculators when borrowing to make stock purchases bid up stock prices to excessive levels and the following sharp declines tend to produce recessions,2
it would also be useful to provide better information about the complex activities of the largest internationally active banks such as securitizations credit risk modeling and credit derivatives,2
examples of operational risk include employee fraud customer lawsuits failed information system conversions and missent wires,2
the  major challenge facing us fiscal authorities is meeting the need for  nearterm economic stimulus while pursuing a practicable plan to stabilize the  governments debtfinance obligations,3
retail sales in the same period went up by 33 percent  as the increased employment as well as higher wages made possible increased consumer spending,0
i think that explains why the banking organizations that are most interested in hr,2
3minority group employment in banking in speaking of equal opportunity for minority groups most observers have in mind negroes spanish americans puerto ricans and mexican americans orientals and american indians,0
such competition would tend to facilitate the transfer of financial resources from savers to borrowers,2
more recently identifying the ultimate sources of institutional demand has become more difficult,2
at the other end of the economic spectrum it is also the home of one of americas great companies with a strong position in one of our most technologically advanced industries,1
the first part of my remarks will highlight the significant progress that has been made over the past several years toward restoring the banking system to good health,2
through the semiannual monetary policy report to congress as well as testimony and speeches federal reserve officials discuss and assess macroeconomic conditions and provide the public with the opportunity to scrutinize the results of past policy actionspolitical pressures have again been targeted at fed policymaking in recent weeks,4
the levels included in the proposed rule are more in the middle of that range and thus higher than the basel surcharges,2
last november the committee initiated an additional 600 billion in purchases of longerterm treasury securities and those transactions were completed at the end of june,3
many such estimates assume that the conduct of monetary policy has been constant over this period in the sense that it was guided by a single consistent pattern of behavior,4
one is the emergence of several developing countriesmost prominently china and indiaas global economic forces and the consequent reorganization of production processes and change in the nature and location of jobs here and abroad,0
the figure also shows the central tendency of the unemployment projections that my fomc colleagues and i made at our january meeting those projections reflect our assessments of the economic outlook given our own individual judgments about the appropriate path of monetary policy,0
bankers implicitly accept risk as a consequence of providing services to customers and also take explicit risk positions that offer profitable returns relative to their risk appetites,2
nor can the average bank afford to retain the services of experts in the various specialty fields,2
only individuals ultimately pay taxes,3
given our unique role as the nations central bank the federal reserve has always stressed contingency planning  for both systemic risks as well as operational failures,2
so from the standpoint of what monetary policy can do i believe the economy is basically at maximum employment one part of the feds dual mandate,0
what is more thrifts hold about 10 percent o f outstanding junk bonds and producers with receivables from leveraged firms must also be counted among creditors,2
these loans represent the lending and borrowing of reserves among depository institutions,2
monetary policy indirectly affects the  economic climate within which all business people make their plans and execute their strategies,4
those figures conceal of course the dramatic increase in the complexity of their activities represented by securitizations and derivative products,2
these arrangements would be more explicit and more liberal than currently provided and it is hoped would be of significant help to banks with wide seasonal swings in fund availability,2
last month at our most recent meeting we took account of the considerable progress the economy has made by modestly increasing our shortterm interest rate target by 14 percentage point to a range of 12 to 34 percent,4
monetary policy since the onset of the financial crisis         the situation in 2008 and 2009 was like nothing the federal reserve had faced since the 1930s,4
the positive effects o f this capital spending will probably be mostly offset however by declining investment in offices apartments condominiums and retail space,1
when a committee makes policy a process involving consensus building and compromise collective rather than individual accountability seems preferable because policies are not simply weighted averages of members wishes,4
yet if for any reason the home jurisdiction resolution is unsuccessful the internal longterm debt will be available to us authorities for orderly resolution and recapitalization of the intermediate holding companies,3
lesson 1 when the shock is unique adapt fast i think a principal lesson from this experience is that forecasters have to consider the nature and the novelty of an economic shock and quickly adapt our models to new situations,4
this morning i would like to review some of the major innovations and changes that have propelled banks to their present state and have allowed them successfully to navigate through a rapidly changing economic and technical environment,2
in addition ive been struck by the large number of accounts ive heard of firms having difficulty finding workers with the appropriate skills in many cases constraining production,1
 speech by richard w fisher president and ceo 20052015 minsky moments and financial regulatory reform remarks before the 19th annual hyman p minsky conference on the state of the us and world economies       april 14 2010  new york city    recent  examinations of the leaders of wall street and big banks by the congress and  the financial crisis inquiry commission bring to mind a quip reputedly made by  napoleon bonaparte never ascribe to malice that which is adequately explained  by incompetence as  a prominent investor from omaha once remarked it is indeed amazing what is  revealed when the financial tide goes out many who were presumably cloaked  with unique insight and thought to be worthy of enormous fees and compensation  packages were revealed as having nothing on,2
in 2015 texas exported approximately 925 billion of goods to mexico,1
in these circumstances it is1 the united states leans over backward in measuring its deficit,3
if the payments system evolves as i have just outlined then it is possible that in the next ten to twenty years the reserve banks will accept only checks that are deposited electronically and that can be presented electronically any remaining paper checks may have to be cleared through other channels,4
watch live  the financial crisis highlighted two major vulnerabilities in the us financial system,2
the conunission has also worked out agreements in the trucking and steel industries which will yield greatly improved job opportunities for blacks in the years ahead,1
moreover they will lack the flexibility to make the necessary adjustments to technologically advanced production processes,1
so ill  proceed in this speech under the presumption is that any new purchases would  take the form of longterm treasuries,3
education plays an ongoing role in economic achievement,0
unfortunately our most disadvantaged communities the ones most troubled by high dropout rates have difficulty attracting and keeping qualified teachers,0
although the circumstances of most southeastern farmers are not as distressed as many of their midwestern colleagues who rely more on grain exports many farmers in this region face the prospects of reduced revenues this year after a lackluster year in 1984 some also are heavily in debt with few prospects for relief,1
this strengthened the incentive of member banks to borrow from federal reserve banks,2
yet we have been a net creditor nation for much of our recent history,2
moreover farming in the southeast as a whole is less dependent on grain crops and hence on export markets which are glutted,1
todays mortgage market offers a broad spectrum of loan products ranging from prime loans for borrowers with indisputably solid credit histories on one end to what have come to be known as predatory loans on the other,0
with a continued decline  consumer spending should continue to fuel the recovery into 1985,0
the remaining 260 banks were designated large local banks,2
but making  the discussions held by me and my colleagues at the fomc subject to  congressional secondguessing or creating a process where bank presidents and  their politically independent boards have to worry about satisfying washington  powers rather than representing their districts viewsthus upsetting the  delicate balance that prevails at fomc deliberationscan only lead us straight  to the fate that was suffered by once great economies like preweimar germany  and preperón argentina,3
how much does it work to bring inflation down and how much does it work to increase unemployment,0
on the other hand the robust domestic inflation and the tenacious deficit in our balance of payments will obviously condition the timing and limit the extent of any relaxation in the prevailing policy of monetary restraint,4
in such times credit should be made more plentiful and less costly in order to stimulate economic activity as was the case last winter and early spring,2
monetary policy has been reasonably successful over the last decadea long period of moderate growth during which inflation was significantly reduced,4
exports contribute meaningfully to gdp reflecting growth of our principal trading partners particularly in asia,1
i like to say that american businesses are creative,1
on the first question both research and market observation suggest that hedgingrelated transactions are large enough to have an effect on the underlying fixedincome markets but the effect is small and dissipates relatively quickly,2
and i can give you some examplesour lawyers at the federal reserve tell me that commercial paper is a commercial loan for purposes of the bank holding company act,2
in our judgment the spendingstream view the deficit view and the highemployment budget view of assessing the influence of the fiscal package of june 1968 on total spending in the economy overlooked several key points,3
persistent weakness in the labor markets in effect permanently disqualifies more workers from a place in the labor force,0
consumer spending accounts for more than twothirds of total spending in the gdp and is now clearly on an upswing,0
on one end of the spectrum research suggests that some of the drop may be   attributed to wealthier families choosing to have only one earner4   so families with the financial ability to make these worklife choices may   account for some of the lost labor force participation,0
several countries have moved to inflationtargeting regimes over the last decade or so setting a numerical target for inflation,4
for the rest of my remarks this afternoon i plan to provide a brief summary of last years us economic story and an outlook for 2008 ill also share some of my personal views on federal reserve monetary policy during this difficult time of economic and financial adjustment,4
it is more than 100 times the countrys                            annual defense budget,3
skills development is still too often seen as a social service rather than an investment,3
this means that unsound banking practices create problems in more than the home country,2
like the council for economic education i believe that education is a path to better economic outcomes for individuals households and the country at large,0
if the monetary authority can be clearer about what it is doing now and plans to do  not in the sense of setting future moves in stone but rather in terms of explaining risks that might influence future policy  then market participants can improve their expectations of future short rates and possibly reduce the premium for uncertainty,4
return to text   13 see board of governors of the federal reserve system and federal deposit insurance corporation 2014 agencies provide feedback on second round resolution plans of firstwave filers joint press release august 5 return to text,4
progress in trade liberalization has continued in recent decadesthough not always at a steady pace as the recent doha round negotiations demonstrate,1
the most severe job losses have been sustained by those with lower earnings and by the socioeconomic groups that are disproportionately represented among lowwage jobs in industries deeply impacted by the pandemic such as leisure and hospitality and retail,0
the crisis demonstrated the importance of forwardlooking supervision that accounted for the possibility of negative outcomes,2
with government saving up lower interest rates can make it easier to mount a vigorous attack on some of our most critical problemsthe need for better housing better cities and a more rapid capital expansionsome people worry about a shortage of mortgage money over the long run but i dont,3
many federal agencies were if not reinvented at least made considerably leaner,3
under these conditions we can be patient before we must inevitably confront the need to diminish the substantial degree of monetary accommodation now in place,4
this is a substantial improvement from the 21 percent of nonagricultural employment which these sectors represented a decade ago but still is almost double the propor tion they represent nationally,0
congress is about to make  changes in social security and pass new energy legislation,3
one involves financial market innovation,2
more transparency and more clarity about what we want to achieve as supervisors and how we approach our work will improve supervision and i have several specific proposals which i have discussed in more detail than i will get into today and plan to implement expeditiously,4
the decline in the overall employment ratio for these age groups compares with an increase of 22 percentage points in the overall unemployment rate in the us economy over the same threeyear period,0
what they usually want to know is how can the federal reserve be making such egregious errors,4
even when small banks are compared with large banks in the same metropolitan area the small banks have a higher rate of return on assets,2
indeed such services as banking restaurants department stores medical care and airports are collectively likely to provide the most new jobs in the southeast this year,0
ill not talk about monetary policy today but instead about an issue of great concern to me the exports side of international trade,1
we have seen and are encouraged by many examples of entrepreneurial community banks embracing technological innovation,0
edge a c t corporations and offices o f foreign banks with multistate operations account fo r 15 more outofstate bank offices,2
the future of the us retail payments system by now i hope i have given you some perspective on the current state of us retail payments and the evolutionary process that brought us there,1
notably despite the tax advantages of 401k contributions and in some cases a generous employer match onequarter of workers eligible for 401k plans do not participate,0
the list of industries in which concessions by unions have occurred is impressive ranging from such wellknown examples as autos and airlines to less widelypublicized cases as meat packing glass printing and newspapers,0
unless bank capital in the past was grossly excessive it is clear that today the degree of protection of many banks provided by capital is less than adequate,2
in that case congress is likely to turn to the financial services holding company as a preferred structural solution,2
in my discussion of the banking view of credit i will summarize the current state of the banking industry,2
i have in mind here something like  fira,2
so american steel producers in the us may find themselves facing sharp competition from firms that are not necessarily more efficient than they are but instead receive subsidies,1
if these points of vulnerability are not adequately protected they could serve to stem the trends that are reshaping the banking industry,2
the answer to this question is  … it depends our mandate is to pursue the maximum level of employment  consistent with longterm price stability,4
with this measure the federal reserve system still must consider other factors such as commercial     8bank desires for excess reserves the distribution of reserves among banks having different reserve requirements and the changing preference of the public for currency in order to control money adequately,2
as responsible americans they must support a program that widens the awareness of the need for fiscal responsibility,3
china and other countries have emerged as manufacturing powerhouses,1
to the contrary we seem to read more reports of capacity reductions than the reverse not exactly surprising when we look back at the trends of the past five years,1
conclusionsour findings are important because neighborhoods and communities affected by the economic downturn will require the active participation of financial institutions,0
roughly fifty percent of mortgage finance in the united states at the present time is intermediated through fannie and freddie either in the form of securitization or direct purchases of mortgages financed through bonds issued by these enterprises,3
it was a close call for me but i did so because i continue to support our efforts to create a highly accommodative monetary environment so as to help the recovery along by using both asset purchases and our thresholdbased approach to forward guidance,4
in fact i hear from a lot of business peopleincluding a few at a recent meeting of my recent small business agriculture and labor advisory councilthat they cant understand why we seem to be so anxious to take action against something they cant see,1
and finally in the future compensation for servicers likely will need to recognize the different resources required for loss mitigation as opposed to simple payment accounting and forwarding,2
congress and the white house approved several rounds of economic relief collectively worth almost three trillion dollars,3
the real estate problems which i have already discussed came to full flower in 1989 with developers unable to sell  10or lease properties built on spec and some borrowers unable to service construction and purchase money mortgages,0
that is not an environment in which stability in financial markets can reasonably be expected and understandably there was a sense of frustration about our economic course,2
3 market capitalization  how much a bank is worth as measured by the market value of its shares outstanding,2
weve been underspending for too long,3
how the hedging of prepayment risk affects markets for both cash and derivative fixedincome instruments seems to be a fruitful topic for future research,2
an expansion of general interstate banking would provide new opportunities for many banks,2
wage determination depends on all the factors that affect labor supply and demand decisions including inflation expectations and trend productivity gains,0
net exports added over a half percentage point to real gdp growth last year and 18 percentage points for the first half of 2008 unfortunately the trade contribution to us growth is likely to decline in the near term in response to diminishing world growth prospects and the recent strength in the dollar,1
changes in federal taxing provisions are found to have an insignificant influence on total spending,3
and chrysler are operators of huge finance companies and gm,2
the  must be shifted from the insurer  for  true  rìsks of loss in financial decisions  to those financiaì  shareholders they represent who make the  managers and the  decisions,2
it embodies the concept that a wellmanaged bank should seek to go beyond simple compliance with minimum capital requirements to assess whether it has sufficient capital to support its risks,2
these includ 1 canputer analysis of financial and operating reports fran the brokerage finns 2 routine annual examination 3 surprise field visits by exchange examiners to check on sales practices as well as finances and operations 4 audits by independent public accountants and 5 rronitoring by coordinators who have infonnation concerning every rrember,2
jerry asked me to comment on manufacturing in the new economy,1
in addition large correspondent banks offered smaller respondent banks an array of bankers bank services including check clearing and banks could take advantage of local and national clearing house arrangements,2
furthermore in a growing world economy trade adjustments that are large in dollar terms but small in percentage terms can be accomplished with a minimum of economic disturbance and without governmental control or intrference,3
referring back to the seven grandfathered interstate bank holding companies,2
and we will take all necessary actions to ensure that the unwinding of our programs is accomplished smoothly and in a timely way consistent with meeting our obligation to foster maximum employment and price stability,4
bank supervision banks are subjected to supervision in addition to regulation as an additional form of government oversight because of their complexity opacity vulnerability to runs and indispensable role in the economy enabling payments transmitting monetary policy and providing credit,2
but more basically we and our elected representatives must perform the most difficult management task of allcur tailing or eliminating government programs which have long since lost their reason for     being,3
therefore improved corporate governance is an essential part of structural reform encouraged by freeing banks from political interference in lending,2
since established banks in many sections of the nation particularly in the midwest the south and the east are tied to their original location these population movements have had widely disparate influences on bank growth,2
in those circumstancesââwhen financial institutions that are otherwise perfectly solid are at risk of failure because market infrastructures are disrupted or more generally when financial instability originates outside the banking sectorââan intervention by the federal reserve would certainly be beneficial and the creation of perverse incentives would probably be limited,2
moreover while nonwhite women represented less than 4 per cent of all women with such jobs they accounted for 10 per cent of those employed in the public sector,0
the tax system is now doing much more than just collecting revenues to pay for spending programs,3
in a historically tight labor market cyclical inflationary pressures will likely remain elevated,0
to the worldwide surge in demand at that tle was added the inflationary financing of a large government deficit amounting in both 1956 and 1957 to about 20 per cent of government expenditures,3
although ive emphasized statements it is also true that the market searches for meaning in the policy actions themselves,4
financial conditions of businesses businesses are also in good financial shape having experienced a dramatic improvement in recent years,1
further to illustrate this same point in the end we were dependent on the judgment of the fdic as to an appropriate solution,3
while this increase might be considered a parallel shift that preserves the backstop philosophy in light of the fact that riskbased requirements have also gone up significantly it does increase the likelihood that the leverage ratio may bind for some of these firms at some timesparticularly for those firms with a brokerdealerintensive business model in which the ratio of total assets to riskweighted assets tends to be higher,2
higher social spending should continue to spur growth but these programs are likely to limit progress on inflation,3
it would make sense then to provide banks with those tools as a balance for the restriction of riskier activities to which they have turned in an effort to remain competitive,2
indeed it remains to be seen whether expansive fiscal policies can be reversed and the federal budget can be returned to balance as we move through the expansion phase of the cycle,3
the housing market has slowed over the past year,0
a surge in financial market innovations and shift in trading participants has paralleled the rise in global imbalances in recent years,2
the scale and scope of the loss in income and wealth experienced by americans was far greater than anything they had seen in the previous 20 years,0
however some critical studies have argued that the cra has been ineffective in addressing discrimination and market failures and that its social costs outweigh its benefits see for example hylton 2006 and barr 2005,2
perhaps most important there is an institutional vehicle that is available that would permit banking organizations to participate in financial modernization with a minimal risk of transference of the safety net subsidy the bank holding company,2
simple policy rules also typically neglect information with potentially important implications for the economic outlook because they focus only on where conditions are today,4
and when small retail establishments are considered separately denial rates for blackowned and whiteowned firms are similar,1
as the record shows credit unions have gone far beyond the expectations of their founders,2
later in the decade we focused on a broader array of issues including risk management measuring bank soundness and the causes and consequences of bank failures,2
to the extent that market participants now feel more comfortable asking for the central banks support when they get into trouble they may be inclined to take on more risk than would otherwise be prudent  thus sowing the seeds for the next crisis,2
as the recently hired temporary census workers are let go we will likely see more big swings in the numbers before we get a more accurate picture of the underlying employment prospects,0
globalization of labor markets  labor is an even more important factor of economic production than capital,0
is it because loan supervision has become too difficult with technological developments and increasing credit needs of agriculture,1
a second element in the entrepreneurial infrastructure in the us is the institutions that provide technical and managerial support,1
the bill that would require us to support government bond prices when market yields equal or exceed 4 per cent really represents an effort to carry out one aspect of monetary policy by inflexible legislation,3
during the financial crisis the success of an ad hoc stress test in assessing the capital needs of and restoring confidence in the nations largest financial institutions encouraged congress to make stress testing a required and regular feature of large firm prudential regulation1 the federal reserve has in the succeeding years substantially refined its supervisory stress test,2
rosy expectations of everincreasing asset values and higher and higher rents created a competitive  feeding frenzy among bankers who adulterated sound lending standards in pursuit of market share,2
several uncertainties still surround the administrations program,3
equality of economic opportunity appeals to our sense of fairness certainly but it also strengthens our economy,0
when the fomc adopted its current level of accommodation in late 2010 yearoveryear core pce inflation was 08 percent,4
the conclusions  of the study were that commercial banks demand for excess reserves  and borrowings changed markedly with interest rates bank loan demand and other factors making free reserves a very poor guide  for stabilization policy,2
1 after  companies have had their margins  gutted by dramatic rises in their cost of goods sold one can envision them  being a little skeptical about the durability of recent price retrenchments in  the commodities markets and taking advantage of every opportunity to buy  protection from being victimized again,1
we also closely monitor potential structural vulnerabilities such as funding models and institutions that provide critical plumbing services to the system,2
we must have an atmosphere in which we can work cooperatively toward a strengthening of the international monetary systembut the network of financial cooperation has served to underpin much more in terms of political and other relationships so vital to5 about the role and standing of the dollar,2
this sort of  cost control is something i think we would all appreciate elsewhere in the public sector,3
history has taught us that countries whose central banks are independent have enjoyed lower inflation than those where the bank is linked to politics,4
concerns about the severity of downturns that follow significant assetprice collapses suggest that the identification and analysis of boombust assetprice cycles could be useful for policy,4
lowering the level of stimulus puts downward pressure on both  inflation and employment,0
this was one of the recommendations of the heller committeethe group established to study financial institutions,2
declining capacity utilization and the slump in corporate profits reinforced the downward spiral,1
the bank regulators involved worked long and hard,4
arguably public confidence   and hence the ability of policymakers to use fiscal instruments aggressively   to address shortterm concerns is enhanced by whatever legislative rules   guidelines or procedures exist thathowever gently or firmlytend to   compel the policymakers to bring the budget back toward balance and the   debtgdp ratio back toward stability after the crisis has passed,3
these higher market rates in turn outstripped the rates that financial institutions were able and willing to pay on their deposittype claims and thus reduced their rate of growth,2
in this particular case there can be said to be a direct form of regulatory attack on the firesales problem,2
so its called the grammleachbliley act  glba for short  and if youll allow me im going to add another vowel and call it gilba so that i can pronounce it in two syllablesgilba has been called historic financial legislation and thats probably fair given its complexity and scope,2
rising demands by pressure groups lead to economic inefficiency and loss of freedom a second type of long run problem is our rising impatience with the free market forces in channeling incomes and resources to the various sectors of the economy,2
2  such credit if tied to the sale of a  particular farm input must not create an imbalance in the farming operation,1
of course recent fiscal policy actions also are influencing the economy,3
those who suggest that adopting a formal inflation objective will cause policymakers to become inflation nutters and somehow limit the feds ability to pursue other policy objectives should examine actual experience,4
7  in its system open market account the fed is allowed to hold only us government securities and securities that are direct obligations of or fully guaranteed by agencies of the united states,3
even when adjusting for levels of education where minorities already lag some minority groups face unemployment rates between oneandahalf and two times higher than the overall unemployment rate,0
like other cities across this country new yorks future is bound to the vitality of its neighborhoods as places to live work learn play worship and invest1 neighborhoods have been the focus of anhds work for over 40 years,0
this is a record of great progress and i believe that it is at least in part a result of the fomcs deliberate but patient removal of monetary accommodation,4
we also need to be flexible in carrying out our traditional payments system functionsprovider of payment services regulator and catalyst for changein the rapidly changing payments landscape,2
local politicians often speak of community development as a noncontroversial objective on a par with motherhood and apple pie,0
at the same time the appetite for risk among financial market participants rose notably over 2017 and much of 2018 and corporate borrowing has reached new heights amid rapid growth and deteriorating underwriting standards in riskier segments such as leveraged lending,2
similarly the central bank should set boundaries and guidelines for its lending policy that it can credibly commit to follow,4
the start of the process of normalization should itself instill confidence on main street,0
we are using largescale asset purchases as a policy tool in an unusual financial and economic environment  one in which future benefits may be more muted,4
i was an assistant secretary at hud in the early 70s when we funded neighborhood housing services of america which helped bring conventional mortgage lending to areas where banks werent lending,0
fhe federal reserve systems creation added to the saga of the state vc1sus federal regulation of banking but it did not essentially alter the competing chartering and supervision systems dating from the civil war,4
we will ensure that the supply of reserves in the banking system remains ample consistent with the fomcs direction2   treasury bill purchases continue to add to the underlying level of reserves and repo operations are keeping reserve levels ample,2
the federal reserve act of 1913 established 12 regional reserve banks and a board of governors in washington dc this represents a compromise between having a public central authority in the federal reserve board in dc and the regional and privatesector representation through the 12 quasiprivate though publicly chartered regional reserve banks,4
with a decreasing fraction of the adult population engaged in work our economy will have fewer individuals producing income and output relative to the total number of residents in the country,0
big units average 650acre medium units average 671acre small units average 2m3  58l facre,1
i hold to this view even though further growth of the feds balance sheet raises concerns of longerterm unintended consequences,4
for instance in the 1990s growth in employment nationwide was about 21 percent but in northeast ohio our employment growth was only half that much about 11 and a half percent,0
inventory investment was cautious and moderate,1
the same applies to banks based in chicago which are not even allowed to branch freely in their headquarter city,2
law is like economics in that although it has its own esoterica known only to initiates it is at bottom a craft whose value lies primarily in its practical application,4
in part as a reaction to heightened competitive pressures intel also shortened its product cycle and increased the frequency of new chip releases shifting its product mix toward morepowerful and consequently highervalue chips,1
more federal spending would aggravate the pressures already evident in financial markets xvrith unparalleled federal demands piled on top of gradually reviving private credit demands,3
for example because of the mix of funding sources mortgage loans can be offered with features such as downâpayment assistance or a belowmarket interest rate,0
within that fence were walls that neatly segmented the various types o f depository institutions,2
we added 227000 jobs in january continuing a steady pace of employment,0
performing this exercise would indicate the inherent uncertainty that policymakers face yet it would also provide a better sense of the likely direction of policy and the variables most related systematically to that policy,4
in addition term bank funding markets remain under pressure as banks and other lenders in these markets conserve capital and liquidity and limit risktaking,2
the participation rate provides a sense of how engaged in work the us population is,0
the jobless rate of about 40 per cent for black teenagers and of more than 20 per cent for blacks between the ages of 20 and 24 express a tragic failure of our economic society,0
from the creation of the system the federal reserve has not only been closely involved in overseeing the nations payment systems but has also been an important operational component of that system,4
within the macroeconomics team we have substantial econometric modeling capability,4
examples of such frameworks are the riskmanagement systems of financial institutions and the financial regulatory systems of the united states and other countries,2
given the lags in the effects of monetary policy that means we will not be able to wait until the unemployment rate is down close to its longterm level,0
for the same reason banks should have recognized that countries are not simply markets in which each bank should aspire to its proper share but again in an important6compared with the high spreads that banks at first sought to impose in reschedulings once the true nature of the risk had become apparent,2
is  designed  to  foster  an efficien t  payment  system  it involves facilitating the movement o f money in our  financial system,2
ensuring adherence to riskmanagement practices any successful organization needs to develop appropriate mechanisms to ensure adherence to and sustainability of its riskmanagement structures and incentives structures are a key mechanism for this purpose,2
under that design a holding company could own separate subsidiaries engaged in commercial banking investment banking securities trading and insurance as well perhaps as real estate brokerage,2
most of the major econometric models assume that a large ingredient of price changes comes from movements in wage rates,0
first of all it applies to all credit for the specified purposes up to 25000,2
in the last fifty yars farm population has been reduced from 321 million or 347 per cent of the total to 159 millin9 or 87 per cent of the total in 1960 based on the new census definition of a farmo even this small fraction includes a large number of parttime farmers ho receive varying but significant portions of their income from offfarm jobs,1
the assurance of the availability of liquidity to sound institutions against good collateral should counter the greater uncertainty and risk aversion that have impaired normal arbitrage and intermediary functions by making those institutions more willing to extend credit and take positions in the process of making markets,2
bankers should support legislative change that broadens their powers,2
stepping back from the crisis and the unique features of the shock the events of last march raise questions about the resiliency of intermediation in the treasury market during periods of market stress,3
another would create a digital jobs database to make it easier to match those with particular skills to employers currently needing those skills,0
it is like setting up a formal neighborhood association with certain decisionand perhaps rulemaking powers,0
and indeed research suggests that workforce development efforts that focus solely on training or retraining adult workers might have only modest effects on employment and job retention11 of course this does not mean that adults cannot or should not learn new skills i am deeply sympathetic to the plight of workers who have been laid off from jobs they performed admirably for decades and i commend those who wish to complete or further their education,0
these governmental activities inevitably affect the allocation of resources,3
because of the sustained  growth in final domestic demand business investment should continue to support expansion in 1985  the recent decline in capital spending by businesses was largely  the result of a rush to import certain equipment before an expected decline o f the dollar or the possible imposition o f import restraints,1
we see one of our roles at the federal reserve as helping the financial services industry resolve many of these issues,2
as you well know many forprofit nonprofit and government entities have committed their energies to increasing homeownership opportunities,0
much of the research presented at the conference drew on the federal reserves 1993 national survey of small business finances,1
such robust rules can form a basis for developing more systematic rulelike policymaking,4
there are relatively simple and cheap ways to change the computation of survivor benefits to cut into this high rate of aged widow poverty,0
the second eras questionâwhether long expansions inevitably breed financial excessesâis a challenging and timely one,2
1  a large body o f research on costs o f producing basic  banking servicesdda savings and time accounts consumer and commercial loans and investmentshas concluded that larger banks have no production cost advantages over small ones,2
the inability of var calculations to adequately measure the risks of certain traded positions may give rise to arbitrage opportunities between the banking book and the trading book because of the lower capital charge that may be afforded trading positions under a var approach that is not optimally risk sensitive,2
the third reason for targeting a low positive rate of inflation is labor market inefficiencies,0
2in the southwest but which also inherited an historic legacy from the old south it might be interesting to focus particularly on the recent economic experience of blacks in the south,0
strong growth abroad seems i lkely support export demands,1
i am not ready to embrace a particular rule as part of a reallife monetary policy strategy but i am encouraged that the design of policy rules is an enormously active research area right now,4
my proposals provide incentives for every bank to become a member of a group of banks that are especially wellmanaged and wellcapitalized,2
to address this constraint we often partner with groups like the florida council on economic education to train teachers in economics and personal finance,0
in addition small businesses employ collectively more than half the privatesector workforce and generate about threefourths of net new jobs each year,0
the twin cities as do the other metropolitan centers in the district affect a much wider area in terms of jobs recreation and the like than would be indicated just by the barebones of city boundaries,0
my degree in biology was of precious little practical value to me during the past 39 years in banking,4
an excellent example of this is the boston feds working cities challenge which began in 2013 informed by the boston feds research and designed in partnership with its network of community development stakeholders the working cities challenge is a grant competition aimed at strengthening civic collaboration and partnerships to help lowincome areas and households in the northeast in an enduring way,0
to do our part in preventing the signals from getting crossed i believe that we at the federal reserve should continue our efforts to make our communications and intentions as clear as possible,4
7 the committee enhanced its forward guidance in august 2011 when it substituted at least through mid2013 for the words an extended period,4
as i said earlier the stability of the banking system is of great value to banks customers,2
since the enactment of the federal securities laws in the new deal days it has not been seriously questioned that the investing public should have ready access to significant information on the stocks that they buy sell or keep tucked away in deposit boxes,1
workforce development thus could include providing students with better information to help them weigh their relative risks and rewards of college attendance,0
however the actual decline in corporate profits during the first quarter of this year may not have been as large as indicated by some of the earlier estimates,1
moreover this fast track legislation will cushion the blow to tradedisplaced workers by prov iding them with job retraining healthcare benefits and wage insurance,0
greater transparency in policymaking along with a commitment to reasonable longrun price stability has enhanced fed credibility,4
on the basis of my familarity with the record i concluded that a particularly promising approach was to observe the fomc at work in those rare instances when it set out especially to make substantive revisions in the form of the directive through which it gives instructions to the manager of the system open marketaccount soma,4
lenders were able to store and analyze vast amounts of data on individual consumers and to estimate models of an individuals creditworthiness using these data,0
1   that observation was made in the context of the way open market operations ought to be conducted but i would like to interpret it more broadly in my remarks today,4
monetary policy communications i believe monetary policy should be set based on the outlook for the economy over the medium run because this is the time horizon over which monetary policy can affect the economy,4
however we think it is also simply good business sense for bankers to make sure that their customers clearly understand the price features and risks of products and services being offered to them,2
there has also been very good progress toward maximum employment but i  will want to see more improvement before i am ready to declare the test of substantial  further progress being met,0
nonetheless institutional changes are just as real as changes in em ployment and they cannot be ignored,0
at the outset i have to profess that i am no fan of industrial policy and there are aspects of this university engagement model that strike me as hav ing an industrial policy flavor,1
or programs to spur job creation,0
this logic suggests central bank independence is an impediment to optimal stabilization policy,4
you can learn the results of our latest deliberations very soon,4
very few are planning to grow their workforce,0
it seems unlikely therefore that changes in the us government budget position can entirely explain the behavior of the us current account over the past decade,3
so how did the bank regulatory system do,2
1  of course the alternative to rulelike policy is discretionary policy in which policymakers are free to choose whatever action seems appropriate or convenient at the time,4
because the presidents of carleton and the board members have been  aware of the enormous responsibility of the board members have been carefully chosen,4
for our part we have begun to train our examination staffs to evaluate banks internal systems,2
another possibility is for a single central bank to offer accounts in multiple currencies,4
but because of the overvalued dollar much of the demand for consumer durables and for business capital goods has been met by imports,1
it doesnt take much perception to know that government today plays a much larger role in our daily lives,3
for example suppose the central bank controlled money growth directlyindeed there is an extensive literature arguing that this policy is the one central banks should pursue,4
if people expect the tax cut to be a onetimeonly event they are likely to spend less than if they believe the tax cut is a permanent policy change,3
banks need to be confident about receiving cra credit to seek out activities and investments in these areas,2
let us be quite clear those who  have opposed the a d m i n i s t r a t i o n  call for higher taxes have made a s forecast even if only implicitly,3
specifically the guidance recommends that institutionsâ promotional materials and descriptions of these products include information about among other things potential increases in consumersâ payment obligations and the potential consequences of increasing principal loan balances and decreasing home equity,0
another example of the wasteful use of resources based on public ordering of production is much of our public housing,3
aftertax income adjusted for prices  but now the twin effects of a declining rate  of inflation and a smaller tax bite should turn consumer spending around by midsummer,0
these requirements are meant to address the vulnerabilities in the otc derivatives market that were highlighted by the 2008 financial crisis,2
the surge in demand for a limited supply of investment funds resulted both in sharp increases in market interest ratesthat is in those rates that were free to move upand very heavy demands on conmercial banks,2
the us as a whole gains from reductions in trade barriers and capital controls but not everyone shares in those gains,0
factors outside the control of bank management however are also importantly related to profitability particularly over the past several years,2
the federal reserve has recently liberalized its regulations pertaining to drect investments in commercial enterprises thereby facilitting debt to equity swaps,2
the majority of the firms in this industry are small and lack the  5   resources to purchase the sophisticated equipment necessary to battle competitors in countries with lowcost labor,1
for the fomc to anchor the publics inflation expectations  which i have argued is essential to meeting our objectives of sustainable economic growth and price stability  our policy decisions and communications must give the public confidence that we will produce low inflation over the long run,4
in turn these demands have provoked heated debates about particular policy responses because of the complexity of mortgage lending and concerns that unduly onerous legal and regulatory barriers could diminish the availability of credit in the subprime market,2
2  this would suggest that bank failures 138 o f which occurred last year the highest in any single year since the depression will probably continue in large numbers,2
to be sure service information understanding and creative lending were all considered to be important competitive tools,2
the feds approach builds on techniques that we have successfully applied to other forms of financial system oversight namely developing clear and consistent standards for assessing financial institutions preparedness establishing corporate governance best practices with respect to cybersecurity acquiring and deploying fed staff with the necessary technical skills to assess riskmanagement practices and encouraging and creating avenues for information sharing among financial institutions and regulators,4
after considering a number of approaches the ways and means committee approved a tax provision that would give mutual institutions three alternatives l they could deduct 60 per cent of taxable income to add to their bad debt reserves 2  they could add an amount sufficient to bring the balance in the reserves for losses on real property loans to 3 per cent of such loans outstanding at the close of a taxable year or 3  they could deduct an amount necessary to bring reserves to a reasonable amount if they could demonstrate to the treasury a need for a greater reserve than is permitted under the first two alternatives,3
under the circumstances the authorities decided the bank was no longer viable,2
foreign cacpetition has driven sane us industries and certain us agriculture dcmn to depression levels,1
consumers have been the key engine of growth in recent years,0
even the higher  end of this range may not be sufficient to accommodate all prospective borrowers if the budget deficit is allowed to rise to 7080 billion or higher,3
you provide a continuous stabilizing influence that keeps the overall system of 12600 banks on an even keel,2
a lower natural rate of interest can complicate the operation of conventional monetary policy,4
those industries in which labor costs are a significant part of overall costs have been under increasing competition from foreign producers with labor costs adjusted for productivity less than ours,0
the main purpose of this  new requirement is to slow down the growth of bank credit which is now proceeding at a very rapid rate,2
large banks already have been directed by the fed to create internal risk classification systems for such purposes and cuttingedge banks have made substantial progress,2
that pension today represents only 46 of its 1979 purchasing powera dramatic reminder of the ravages of inflation,0
international bank regulation also bears on the competitive position of banks,2
all of this began to break down in may 1975 when trading among institutional investors and competition from regional exchanges forced the new york stock exchangeafter more than 200 yearsto abandon fixed commissions,2
importantly attention is being paid not only to the risks to individual firms but also to potential systemic risks arising from firms common exposures or sensitivity to common shocks,2
many forecasters have downgraded consumer spending in the second half of the year as delta has limited the acceleration in services spending that had been anticipated to help offset the drag on activity from fiscal support shifting from being a tailwind to a headwind,3
the irony is of course that those two industries ir particular have been protected for years and protection was not only unable to sav them but may have accelerated their weakening,1
indeed even the fsb proposal does not extend to sfts backed by government collateral a very important source of shortterm wholesale funds,2
the more skilled the population the faster is the rate of innovation,1
homeownership may be a laudable social goal but if so we should subsidize housing equity not housing leverage,0
deposit pricing for banks appears to have hit its lower bound in 2015,2
monetary policy in the current environment at the same time developments in the current business cycle including the attacks of september 11 have induced the fed to provide an extraordinary degree of monetary stimulus to the economy,4
people seem to feel disenfranchised from the government overall,3
and so we come to our question will the banking system somehow be able to continue a rapid expansion of farm loans or will banks in the future have a less dominant role in farm financing 2 2 and so for two decades credit has poured into agricultureinto replacement of obsolete machinery into enlargement of acreage and enterprises on individual farms into supporting a larger volume of cash production expenses and into the transfer of a more costly capital plant from one generation to the next,1
this exceeded in imagination anything in my extensive experience as head of the trust department of a large commercial bank of the devices used by salesmen to get in without an appointment,2
this has been particularly evident in recent years with the alternative minimum tax or amt,3
in fact during the days following the september 11 attack the fed provided massive amounts of liquidity to the markets through regular open market operations lending at the discount window and through the provision of check float,2
the census bureau uses tax reports as a way of identifying establishments to include in its business register,3
rather at least in some cases it seems that a banks size is determined by its deposit franchise and that taking these deposits as given its problem then becomes one of how best to invest them,2
if a bank does no more than offer its products on the internet search engines will enable customers to compare its interest rates and fees with those of all other banks that have internet sites,2
practically everyone who made or listened to speeches would have these volumespersons chairing meetings would stand up and say simply ladies and gentlemen we have with us today mr  or mrs or ms blank and would add the speakers title or position after which the chair person would only have to say number 741 to concludc the introduction,4
any major policy decision that appeared to be at variance with a strong antiinflationary stancewhether it be congressional unwillingness to make the hard decisions on expenditure cuts import restrictions on autos or other goods or a backing away from a firm commitment to monetary restraintwould have a severely damaging effect on public confidence,0
regional and community institutions  that have for the most part stuck to the public utility function have faced  their own difficulties especially in the context of construction lending,0
the overall theme today is international financial crises what role for government,3
and second the stress tests broke new ground in regulatory transparency by showing that regulators would enforce capital requirements and impose consequences for firms that fell short of those requirements,2
my own expectation is that a strong turnaround in business investment spending is several months away,1
going forward strong growth in demand will induce businesses to slowly add to their payrolls,1
national bank branches may be authorized only to the extent that a statechartered bank is expressly authorized by state law to establish branches,2
we also bolstered our insight into firm behavior through surveys,1
the gray shading denotes a modelbased 70 percent confidence interval for the unemployment rate based on the sorts of shocks that have hit the economy over the past 40 years3 judging from historical experience the consensus projection could be quite far off in either direction,0
ultimately the only source of capital from the federal government absent new legislation is from the federal deposit insurance corp a very interesting case arose with the terrorist attacks on 911,3
but the bar for such  action remains very high for me until the fiscal authorities do their job by  reducing the fiscal and regulatory uncertainty that is holding our mighty  economy back,3
a notable feature of the worsening of the recession in late 2008 was the sharp collapse of worldwide trade in manufactured goodsthe recovery that began in the second half of 2009 has been patchy and has yet to produce a sustained period of abovetrend growth,1
cdfis are also a principal conduit of the federal new markets tax credit program which supports small business development in lowincome communities,0
the similar circumstance of our nation means that it will be painful to cut the deficits and eventually begin to pay down the national debt,3
spreads on investmentgrade corporate bonds have widened over the last month but still the level of yields on such debt has fallen,1
when expectations are not well aligned either policymakers arent communicating the rationale for their own policy views very well or they are communicating but market participants arent buying it,4
and research shows that when it comes to labor market success geds are not the equivalent of a high school degree,0
to be sure there are also areas of weakness in the economy specifically government spending and international trade,3
financial conditions are highly accommodative and credit is available on reasonable terms for manyâthough not allâhouseholds and businesses,0
people with less education face challenges in the labor market,0
in  deed the fact that reserve balances can and do play this role  is one  of  the  characteristics  of  the  system  that  11      permits it to work with the high degree of efficiency we have all grown so accustomed to,2
these interbank transfers of funds involve no shipment of currency or checks and no further processing of the  4original instruction or authorization,2
the civic federation was particularly troubled by the emerging phenomenon of big city poverty and rising unemployment,0
this has been a topic of particular interest here in chicago with the recent settlement between united airlines and the pbgc shifting to the pbgc certain liabilities associated with uniteds pension plan,0
different signals from the labor market and inflation let me start by reviewing the conflicting readings we are getting from the labor market and from inflation,0
they have reminded  us that everything is on loan from them2 the senate retained its  leadership but underwent a sea change of composition,3
federal reserve actions to support interbank settlement of faster payments 84 fed,2
the pervasive economic weakness abroad in industrial as well as in developing countries with possible repercussions on the world financial systemb,2
a  globe  let  alone  demonstrate  necessary  skills  in  math  and  we are also lagging badly in making needed investments in our roads  bridges and harborsthe infrastructure that moves our goods to market,1
by providing loans as small as 5000 the fund helps to stabilize and preserve the economic viability of the neighborhood,0
for it is also true that our system of  government functions through political structures and with attention to political values,3
in describing the bank of england lanchester writes theres  a lot of ritual and ceremony and protocol at the bank which to outsiders seems  a cross between hogwarts the death star and the office of ebenezer scrooge1  the same can be said of the federal reserve at least by those who dont take  the time to read the copious amounts of reports and speeches and explanations  the 12 federal reserve banks and the board of governors continuously emit,4
in line with the presidents initiative to reduce regulatory burden to all businesses the federal reserve  board in conjunction with the other agencies is currently developing a proposal to amend its appraisal regulation,1
if the inflation that now exists in the united states were allowed to continue at its present rate over a normal working lifetime then when young americans today reich retirement age hey will have a dollar that is worth less than a dime,0
it takes strong collaboration among all of these entities to revitalize the economies of distressed communitiesperhaps you are wondering why a federal reserve bank president like me is trying to foster local collaborations to achieve community development,0
government admitted it had not succeeded and could not afford to continue to try to do it all alone,3
in addition looplike movements around the beveridge curve are common during recoveries,0
in the absence of any other governmental agency having the authority to fill the role we have lent to stabilize several systemically important institutions any one of whichhad it failedwould have posed a serious threat to the financial system and the economy,2
however you will be hearing more from the federal reserve about these data as we conduct further analysis,4
today agriculture  buys from business almost 50 per cent of its production items in the form of machinery tractor fuel commercial fertilizer mixed feeds building materials and so forth,1
16 however the feds mandate is much more explicit about the role of employment than that of most flexible inflationtargeting central banks and our statement reflects this by stating that when the two sides of the mandate are in conflict neither one takes precedence over the other,4
lessons for risk management at financial institutionswith that brief diagnosis of our financial market turmoil as background i turn now to some of the lessons learned thus far regarding the riskmanagement practices of financial institutions,2
in contrast economies that rely on centralized capital provision generally see less pressure for public disclosure,4
in the past most payment services produced benefits for the collecting institution in the form of lowercost collection or accelerated availability,2
still other programs are fully reflected as current expenditures even though they result in the government receiving back mortgages notes or similar evidence of debt,3
a binge of special interest to you i should say because the most spectacular savings rise has been in the funds placed with financial intermediaries from the standpoint of these institutions investment of the expanded flow of funds has posed a major challenge to the skill and ingenuity of management particularly since the demands for credit in the last year or so lacked a comparable buoyancy,2
the end result here is that industries are becoming increasingly concentrated and the average listed company is bigger older and more profitable,1
for a large complex banking organization dealing with compliance risk can be particularly challenging unless it has a welldeveloped riskmanagement program,2
compliance with consumer protection regulations receives close scrutiny and consumer compliance specialists participate in the evaluation of the risk assessments supervisory plans and annual letters that our supervisors prepare for large complex banking organizations,2
potential impediments to efficient resource utilization  overall our evolving financial system has been highly successful in promoting growth and higher standards of living,2
i should note that real disposable income has actually increased at a 44 percent annual rate in the last two quarters so firmer spending should not be too much of a surprise,0
we have to conclude that the fomc is  underperforming with respect to its goal of promoting maximum employment,0
no central bank around the world would argue otherwise,4
this shift could be important to the extent that hfts may have more limited capacity to support liquidity resilience since on average hfts appear to trade with smaller inventories and lower capital than traditional traders,2
achieving inclusion will require a holistic understanding of the challenges faced by underserved groups in order to develop full stack solutions to address them1 fortunately an emerging generation of metrics may offer a more complete picture of consumers financial needs,0
11 and if you are in more than one federal reserve district where is your friendly helpful fatherly central banker,4
however many studies indicate that the main effect has been higher wages for workers already holding comfortable jobs and unemployment for many of the lowincome workers the law was supposed to benefit,0
others view thresholds as a way to signal that the fomc will wait a very long time before beginning to tighten policy,2
this means m o n e t a r y policy will  continue to attempt the dampening of domestic and international events on our mon ey markets and given the magnitude and frequency of these events there is little reason to expect stability of either rates or availability of funds,2
consequently shifts in business outlook are rarely so definite and clearcut that monetary authorities can decide abruptly to shift credit policy from restraint to ease  or vice versa,1
industry too was largely on a hand labor and horsepower basis,1
essentially the difficulties arise from the thinness of capital and managerial resources in the black community,0
rule government should do only those few things that the market economy clearly cannot do well,3
the combination of project financier financial catalyst and institution builder makes the banks uniquely effective agents of development,2
while our battles arc by no means won it is an appropriate time to examine some other longerrun issues issues that have clung to the cloaks of bankers for a long long time impervious to whether credit conditions have been tight or easy or whether the economy has been in boom or recession,2
we want to encourage a more efficient payments system,2
the interaction of these forces has led to a major restructuring of production processesat home and abroadand a redistribution of these processes and associated jobs geographically around the globe,0
the burden of this deficit will carry over to future generations,3
this oldtimer would discover that while he was napping  market forces had changed the regulated world o f the past into one that requires much more creativity and less adherence to procedures,2
selling sufficient securities to finance the massive deficit places great direct upward pressure on interest rates,3
of course at the end of the day the issue is not the stability of currencies but the underlying policies that engender stable currencies,4
fiscal incentives run the gamut  from direct subsidies to tax foregiveness to loans on favorable terms,3
to this point my remarks have reflected the familiar perspective that identifies a set of market practices carrying significant risk of negative externalitiesin this case with some collective action problems thrown inand then asks how to fashion an appropriate regulatory response,2
in addition to the effects of uncertainty consumers face the ongoing work of restoring the health of their balance sheets,0
another change in the composition of the national economy is that personal consumption expenditure as a share of g n p  which was high and rising in the 1980s will be lower in the 1990s,0
nowhere have these tensions been more evident than in the ongoing debate over the appropriate government regulation of derivative contracts a debate which has varied in intensity but has never fully subsided for at least ten years,2
i expect the unemployment rate will fall to around 8 to 8½ percent by the end of next year,0
our conference also considered the policy issues from the firms perspective,1
in reality however only those families around and just above the middle of the distribution come close to receiving approximately this proportion of the total income,0
clearly it is time to better define the area in which the agencies evaluate a banks cra activities but it is important to retain a focus on the credit needs of local communities,0
we intend to continue this practice for other policies and guidance and to continue to speak with community bankers to respond to their questions and concerns and to clarify our supervisory expectations,0
also venture capital funds with a social mission support small business and economic development in distressed and disadvantaged communities,0
in  fact recently i heard a banker tell an agricultural meeting that one reason for being optimistic about the future of agriculture was the large number of bright young men entering this and related businesses,1
evaluating all of the indicators the fomc expectsas outlined in its june 17 statementthat with appropriate policy accommodation economic activity will expand at a moderate pace with labor market indicators continuing to move toward levels consistent with the dual mandate,4
that recently  enacted statute allows bank holding companies from any of nine other southeastern states which passes a similar law to acquire georgia banks,2
however if total cooperation cannot be achieved other farm credit discount facilities may be necessary,1
for example scholars have found that one source of fragility during the great depression was the privately run correspondent banking system that is the system used mostly by nonfedmember banks to clear payments,2
clearly inflation poses a serious threat to the quality of life in this country,0
credit markets are open,2
in most of these countries institutions similar to the us securities and exchange commission are largely ineffective or nonexistent internationally accepted accounting standards are not followed and regulations requiring full disclosure are frequently absent,2
over the following years most banks greatly improved their capital positions until the present erosion set in,2
it is of course the best of all possible worlds if a city has an industry that can pass on large tax costs to nonresidentsbut this does not happen often or for longthe point about this digression into the characteristics of the economic base for taxation is to try to show that cities are not as free as they believe they are to adopt the sources of revenue used by state and the federal government,3
with the impressive growth in international banking activity in florida since the passage of the florida international banking act 20 years ago it is particularly important to ensure that the year 2000 challenge is effectively addressed by all banks conducting an international business in the local and state markets,2
public disclosure that a bank had greater than expected trading losses would subject it to the critical evaluation of the marketplace,2
there is therefore a practical limit to the number of institutions that weand i would argue other countriescan effectively supervise under the irb approaches,2
since the inception of the new rate ceiling structure in 1966 thrift institutions and conmercial banks have been pennitted to offer progressively higher rates of interest usually in a lagged and muted response to market developments,2
3783 in which it is proposed to retire federal reserve bank stock but i want to range a bit more widely in my general remarks,4
the adoption of price and wage controls by the united states government in a period of peacetime is a move which has strong longterm implications for our basically free market economy,3
however official machinery does exist for the evolution of such a policy machinery that involves consultation and coordination among the key policymaking agencies in the administration eg the council of economic advisers the treasury department and the bureau of the budget,3
one thing weve been doing for some years now in the eighth district is an evening program with bankers we call district dialogue we 4  travel around the district to all the major and notsomajor cities and towns usually making two or three stops on any given road tour,2
the unemployment rate will gradually decline but it will take some time before it returns to a more acceptable level,0
in the nine decades since the founding of the federal reserve system the united states has experienced two large sustained departures from price stability,4
securities will now be made  available through an auction process with an expanded array of collateral on a  weekly basis for a term of 28 days,2
indeed our credibility has  been critical in the past crisis,4
depository institutions would continue to be supervised by their current bank or thrift regulators with functional regulation of the new nonbank activities by their specialized regulators and umbrella supervision of the diversified financial services holding company by the federal reserve,2
for example the bcbs is currently considering a proposal that would set a gsibs slr surcharge at a level that is proportional to the gsibs riskbased capital surcharge,2
mexico was impoverished  by the central banks complicity with the governments fiscal mismanagement,3
based on that assessment of the health of the economy and its likely path forward last week i voted with my colleagues on the fomc to raise the federal funds target range by 25 basis points to 2 to 225 percent,4
current law exempts these contracts from various provisions of the bankruptcy code including the automatic stay provisions,2
b at the same time unemployment rates in the region are below the nations average and have been for seven years running,0
my projection is that if we want to keep inflation at 2 percent we will likely need to raise rates in 2013 incoming data could change my assessment in either direction weaker data could lead me to push out my projection and stronger data could lead me to advance my projection,4
unemployment also was high 50 years ago although not quite as high as it is now,0
it is not plausible to me that a public sector which so far has been limited to little more than onefifth justifies calling an economy mixed,3
i hope they will discuss to what extent central banks can and should guide privatesector expectations about future policy and how they can avoid situations in which they may feel pressure to ratify private expectations to avoid market disruptions,4
if we succeed in opening up opportunities to everyone the affluence          within our borders will almost surely become more equally distributed,0
monetary policy can do little to reverse the effects that the financial crisis may have had on the economys productive potential,4
as a result the downturn in the energy sector has been steeper and its impact more widespread and severe,1
third i want to emphasize the important role for bank supervision,2
in the end it is  difficult to say whether glb strengthens or weakens cra,2
for bank supervision reflections about our banking history also highlight the extent to which our supervisory policies mirror the infrastructure and political decisions that create the framework in which banks operate,2
but policymakers should recognize that financial market turmoil is not a gardenvariety shock to output,2
indeed the committee reached a landmark in the spring of 2003 when the fomc statement acknowledged that it was possible that inflation could become uncomfortably low,4
the unemployment rate has remained close to 10 percent since mid2009 with a substantial fraction of the unemployed out of work for six months or longer,0
there was significant financialsector development during this time with commercial banks equity markets and corporate bond markets all playing a growing role in financial intermediation in the us economy,2
at that time the discount rates of the federal reserve banks were raised from 4 to 412 per cent and maximum rates payable by commercial banks on time deposits were raised to 512 per cent,4
so while the challenge of the 1980s was to absorb the very large quantity of n e w workers the challenge of the 1990s will be to respond to the changing composition of the labor force,0
the commitments already made and contemplated for years  ahead indicate the confidence the steel industry has in this area,1
over time fed policy affects economic activity but it is not the only factor influencing the economy at any given time,4
similarly dismantling controls on the domestic financial industry has proven counterproductive when important complementary factorssuch as effective bank supervision the availability of bank managers trained in marketbased lending or consumer familiarity with financial products such as credit cardswere absent,2
i am concerned about the commercial real estate sector and how its performance could affect the banking system which i addressed in a recent speech,2
to give us the best chance to recover lost ground we need policies that support labor force participation business and household confidence hiring and investment and productivity growthpolicies i hasten to add that are for the most part outside the remit of the federal reserve,4
and they will place a premium on cooperation and appropriate information sharing between the primary bank regulator and the federal reserve as umbrella supervisor while at the same time we work together to minimize duplication and avoid excessive burden,2
that flexibility could entail doing more to ease credit if the economy proves resistant to the monetary and fiscal stimulus now in train or it could involve reversing actions to forestall potential inflationary effects of past actions as i will discuss in a moment,4
a  recent  example  of  such  wellintentioned  but  fundamentally  misguided public pressure on the federal reserve stems from widespread concern that this nations international competitive position has been dangerously weakened during this decade,4
but that assumes that these students have accurate information on which to base their calculations,0
and the greater the share of the overall financing job assigned to them the more of the financing will have to go toward the stronger and safer countriesin this context there is no good answer to the question how much bank lending is enough any more than to the question whether enough is too much or whether perhaps as mark twain said about whiskey too much is barely enough,2
the committee stated that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time,4
although these activities are sensible for the firms and people who engage in them they are socially wasteful because they merely alter the pattern of inflations redistribution of wealth rather than adding to wealth,0
pretty much the same applies if the investor owns tax exempts yielding 56 per cent,2
if solvent banks are confident that they will be able to borrow from the central bank against good collateral to meet any unforeseen funding needs then they need not completely stop lending even amid increased uncertainty about future funding needs,2
but the record of the past 30 years does indicate that banks have done quite w0ll in a world of rapid financial innovation increasing competition and advancing technology,2
this concept has received a great deal of welldeserved attention in the regulatory reform deliberations currently taking place,2
while price pressures began to mount late in the 1980s the fed succeeded in reining them in as well as in lowering inflation significantly that it is now so close to 3 percent,4
we cannot fine tune because 1  our forecasts of the economy are subject to too much error,4
we need assurance that these institutions will handle routine and nonroutine transactions properly long after examiners leave the bank,2
the rule is that at any time the least attained policy goal should have priority,4
i vowed not to repeat the same mistakes,4
our need to service this debt guarantees that in the next decade we will continue to experience budget shortfallsespecially when the social security surplus which is added to the budget through some creative accounting is discounted,3
as a result information about the feds policy goals its assessment of the current economic situation and its strategic direction are increasingly a part of the public record,4
this leverage was facilitated by shortterm wholesale borrowing owing in part to marketbased vehicles such as money market mutual funds and assetbacked commercial paper programs that allowed the rapid expansion of liquidity transformation outside of the regulated depository sector,2
federal reserve staff are actively considering additional measures that could address these and other residual risks in the shortterm wholesale funding markets,2
legislators have attempted to work around this pitfall requiring changes to  large banking companies whose wills are found wantingprior to a crisis,2
financial technology involves no less creativity because unlike other forms of technology it can all be done with a sharp pencil,2
similarly demonds for funds to finance expenditures hve outrun the available supplies of savings and the price of longterm funds has incre2sed for all borrowers,2
we expect healthy output growth supported by both a return to full employment of our labor force and continued strong trend growth in the productivity of that labor force,0
stayathome orders have been lifted and though large segments of the economy remain depressed millions of americans have returned to their jobs,0
for example the population studies show that in 190 3 out of  every 100 workers employed in the state of georgia were engaged in farming,0
but even if inflation is not precisely related to money growth in the long run because of shifts in velocity the monetary authority ultimately determines and is therefore responsible for inflation in the long run,4
in the language of business this means that we need to strengthen the entire supply chain,1
how should the regulatory system be structured to be maximally effective,2
absent a public voice or participation these arrangements can become excessively concerned with corporate intereststhe federal reserve has long provided a national clearing system linking all banksmembers directly and nonmembers indirectly,2
over a hundred such institutions including us and foreign firms     10  specializing  in  international  banking  are  located  in  the  southeast,2
so as i look at the economy as a whole i have to believe that the most important reason for the excellent economic performance were seeing is that inflation has been low and stableand that there is confidence that the fed is committed to holding the gains that have been made on inflation,4
however it highlights the fact that foreign banks may be a very real competitive force in local markets,2
more fundamentally the approach to these prudential limits is visible in the trade surpluses that are now emerging,1
for example early intervention policies triggered by more accurate capital standards could prove to be important in crisis prevention,2
better communication and information sharing will benefit both you and the federal reserve but my motivation is that the fed has much to gain here,4
therefore we need to determine what capital requirements are necessary in order to survive the kinds of economic shocks that can arise in our present economic environment,2
w e have already begun to see a substitution of quality workers for quantity of workers,0
the establishment of legal priorities is simply a method of substituting the collective decision  of government for individual decisionmaking,3
because of the way benefits for surviving spouses are computed america still has high poverty rates among aged widows rates that are much higher than those in other developed countries,0
this is a rob peter to pay paul chain of events  with the taxpayer playing the role of peter,0
we cant push this all on the public sector which especially now doesnt have the bandwidth or the money,3
the basel committee on banking supervision is playing a key role in designing this new regulatory regime as part of the basel iii initiative,2
a  b  american industries must adapt to new world marketplace,1
one of the most important benefits of inflation targeting was that it resulted in wellanchored inflation expectations,4
agin the divergent experience of banks of different size is also clear aljqg money market banks interest payllents on time deposits in 1966 represented 47 per cent of operating expenses the ratio declined to 42 per cent fo small banks and to only 28 per cent f9r local institutions,2
accordingly this fternoon i would like to focus my remarks on the implementation of monetary policy,4
however morgan and his colleagues decided that they did not have sufficient information to judge the solvency of the affected institutions so they declined to lend,2
too little credit can choke an economy as businesses cant find adequate funding for expansion and consumers are unable to borrow against their future income to purchase cars and houses and to invest in education and training,2
some banks make commitments or announce new programs just before a scheduled cra examination is to take place,2
again to take an example from  minnesota you have probably read about the famous case of the reserve mining company and the states efforts to halt the dumping of 67000 tons a day of taconite tailings into lake superior even at the possible cost of several thousand jobs in an area of the state where jobs are far from plentiful,0
through the study we have been able to determine that a longrun strategy to control risk will require the careful balancing of the risk borne by the federal reserve against that borne by the private sectorin crafting a future policy to control risk the federal reserve needs to consider carefully the tradeoffs associated with a regulatory solution versus the tradeoffs possible with a marketoriented approach,2
a rather dramatic effort to deal with the budget was made recently by the president and the congressional leadership,3
finally in that context i will suggest the sorts of powers that i believe are consistent with those principlesas individuals in the trenches or the front line of banking you are no doubt more aware than i of the developments over the past five years that have had an effect on the competitive structure of banking and have necessitated a review and redefinition of the regulatory structure tor banks and bank holding companies,2
i believe this expectation played a significant role in driving up both wages and prices without the expected reduction in unemployment,0
we expect to work with each organization through the supervisory process in refining its plan,2
the greatest return to adopting information technology appears five to seven years after investment according to erik brynjolfsson and lorin m hitt 2003 computing productivity firmlevel evidence review of economics and statistics vol,1
however regional overnight check clearance is no more than an interim measure because of the time bomb hidden in the check payments system,2
in the late summer of 1969 however monetary conditions were getting too tight as evidenced by the behavior of mi as well as by the further rise in longterm interest rates at a stage that was obviously very late in the cycle,2
usually uncertainty about employment growth is a consequence of uncertainty about gdp growth,0
first it will be noted that for each class of connnercial bank loans operating costs absorb a significant share of the gross yield,2
on the other end of the cycle during the downturn labor productivity suffers as firms attempt to hold on to their workers in the face of reduced output,0
over the last ten yearswhile the maximum dividend rates paid by credit unions have remained about the sameother institutions have made significant upward adjustments thus compressing the whole yield structurethe greatest change since 1956 has come from commercial banks where the maximum rate offered has increased 112 percentage points on passbook savings and 3 percentage points on time deposits,2
this technique incidentally were it applied to bank statements probably would stretch out the economically useful life of the check by truncating its flow and eliminating the necessity of returning it to the payorthe major problem of the bank credit card as i see it is the danger that the public responsibility which goes with the management of a device so closely and intimately related to money may be given too low a priority,0
one card network estimates that 95 percent of retail purchases over the internet in 1999 were made using debit credit and other payment cards,0
banks and real estate firms are also stronger,2
improvements in labor quality are no longer adding much to productivity in the aggregate,1
indeed it has not been uncommon in the past few years for financial markets to react more strongly to changes in the wording of the committees statement than to its decision about the target for the federal funds rate itself,4
during the past two decades exports in volume terms have risen from seven percent to twelve percent of the output of goods,1
the recent behavior of wages provides additional evidence pertaining to the degree of labor market slack,0
here i include the increased use of rotational grazing of livestock to improve rangeland quality and utilization,1
in addition american consumers will have to pay higher prices for goods from abroad,0
indeed calls for new regulation in several deregulated industries have all but drowned out voices of those who still see potential benefits from further deregulation,2
or does it reflect a more permanent increase  an increase that could reduce the potential inflationary pressures generated by tightness in the labor markets,0
nevertheless i do think there is a useful message to be borne in mind when thinking about communications strategy more generally,4
but shareholders would not be protected and i would anticipate appropriate discounts or haircuts for other than federally guaranteed liabilities,2
given the natural growth in our labor force and the return of reservists to the economy the delay in job growth may elevate unemployment rates in the near term,0
certainly not all of the 96 percent unemployment rate can be explained by these painful structural adjustments but these factors do suggest that it will likely take some time for the labor market to heal,0
in the early twentieth century the electrification of production operations and the electric motor did not substantially raise manufacturing productivity until firms realized that electricity allowed them to rethink the layout of their factories,1
one day in the midst of the nations worst banking  crisis  the president of a small bank called the fed,2
each of these tests is further divided into two subtests which would result in large banks being evaluated under four subtests in each assessment area,2
in fact some groups that began the period in the worst economic shape including teenagers and those at the bottom end of the education and income distributions have enjoyed substantial gains,0
unless state laws conform  substantially to those provisions contained in the douglas bill including the simple annual interest requirement they would have to be amended,2
it is tempting to suggest that the budget problem can be dealt with as a passive byproduct of recovery and i am afraid some in washington are in a mood where they may not be above temptation but it is wishful thinking,3
such was the case in the federal reserves reaction to the penn central default of 1970 the stock market crash of 1987 the 911 terrorist attacks and the initial stages of the recent financial crisis in august 2007 discount window loans have to be collateralized to the satisfaction of the lending reserve bank and it is noteworthy that all of the federal reserve systems lending during the great financial crisis was collateralized and that all the loans have been repaid in full on time and with interest,4
the reduced wealth makes it difficult for the taxpayer to borrow to augment his income,0
in a time of rising public skepticism about experts which can undermine public trust in institutions being systematic will help the public understand how our decisions are actually made which can enhance the feds credibility,4
the president and congress must resolve this issue,3
also like other central banks the boj purchases interestbearing assets with money that it creates and thus typically earns significant profits or seignorage,4
a m o n g them are government vouchers that can be used to pay for tuition at the parents school of choice and schools operated by entrepreneurs under contract to local school boards,3
today if i read the signs right consumption even more than in the past outranks production as a national concern,0
capital is in  this is the negative side of the banking picture  which the fed and other supervisors will have to stay very much on top of,2
in my view the reduction in leverage and maturity transformation associated with better regulations leaves the financial system much more resilienteven if such regulations have modestly affected market liquidity,2
it demonstrated once again  our ability to rise above adversity and to continue with rugged determination to achieve a quality o f life made rich not just by material goods but by justice and spiritual values as well,0
first community banks are feeling the same intense competitive pressures that larger banks are feeling,0
however banks in general have come a long way in the past year toward correcting the situations including overdependence on highly volatile deposits and overexpansion of bank holding companies that gave so much cause for concern last sunnner,2
the second is the confidence host jurisdiction regulators have that the parent banks are subject to effective regulatory and supervisory oversight,2
often credit availability is tied to having an account relationship,2
the assessment found that if the economy were to track the specified more adverse scenario losses at the 19 firms during 2009 and 2010 could total about 600 billion,2
in addition because of the global nature of the crisis the fed coordinated with other central banks to provide liquidity via swap agreements,2
i try to think of myself as speaking to portfolio managers who have a mediumterm horizon rather than to traders who have a horizon measured in hours or a few days,2
of course our information would be much better if all demand deposit and now account issuers were supplying continuous timely reports of their deposits and reserves,2
for those with a high school diploma but no college training unemployment averaged 35  booms recessions and the economically disadvantaged  percent in 2000 having fallen from 73 percent in mid1992,0
monetary policy does not get made in a vacuum,4
8 the former comptroller general of the united states david walker  estimates the medicare deficit to be less only 34 trillion so lets work  with his lessexcitable numbers,3
in effect they argue that even if individual firms manage their risks prudently and effectively the aggregate effect of their activities may be to make the financial system less stable,2
moreover failure of inefficient firms releases labor and capital resources to be reallocated to more efficient uses or more efficient managers,1
this represented a noticeable slowing in the rate at which banks entered the credit card business,2
also while the economy overall has recovered business investment spending has been weak through most of the recovery period to date,1
if the restructurers assessment of the potential of the corporation is correct and the necessary funds are5identifies mismanaged companies and promises to direct freecash flow away from wasteful projects once control of the corporation is achieved,1
it is also fairly obvious to me that the american ethic of shortterm profits and matching shortterm strategies puts american banks and financial institutions at a great disadvantage,2
local community banks with knowledge of their markets may become valued participants in loans with larger banks,0
id like to talk about the trouble with the federal budget,3
parents of university students want lower tuition more course offerings and more connections between students and faculty members,0
thus before the doddfrank act was  even proposed we wrote that guarding against a resurgence of the omnivorous  tbtf blob must be among the goals of financial reform2 in previous speeches i have taken note of another dimension to the  problem of sustaining behemoth financial institutions and that is the cost of  doing so,2
they also may be more flexible in adopting new technologies and in responding to the forces of creative destruction,1
in the remainder of my time with you here today i will speak briefly  about the operations of the dallas fed and of the other 11 federal reserve banks,4
i dont think that is a productive kind of openness because one of the difficulties we face is that very often the right economic policy may be right in the long run but very difficult in the short run,4
this poses obvious problems for individuals and families  but it also   poses problems for our economy,0
but now were facetoface with the truth  at a time of tigh t federal reserve monetary policy and  of a continued high level of private credit demands the federal governments borrowing demands have been r is i n g rather than declining with severe consequences for the markets,3
as to nonperforming loans the additional disclosure proposed by the sec conpared to that recommended by the banking agencies would be in my opinion counterproductive to steps needed to strengthen the capital position of large banks gnerally,2
we all welcome president carters threat to exercise his veto author ity to keep spending under control,3
why then do we accept the relationship for thriftn and not for banks,2
idle plants across the country are reopening or are recalling furloughed workers,1
unconfirmed trades increase the potential for material inaccuracies in trade records which can cause mismeasurement and mismanagement of market risks and counterparty credit risks,2
while the form of this energy tax on consumers is changing with the seasons i think its overall impact is not,3
to date about 630 bank holding companies have chosen to become financial holding companies the vehicle under the glb act through which bank insurance and securities affiliations may take place,2
we have declared a 2 percent intermediate  target for inflation which seems to be standard for most central banks,4
country exposure in relation to capital has tended to rise for many of the lending banks,2
in the 1960s the employment ratio of these individuals was over 80 percent less than 10 percentage points lower than that of the entire male population ages 20 to 64 by 2001 the employment ratio of this group was only 65 percent almost 20 percentage points less than the employment ratio for the entire male population ages 20 to 64 i find the substantial increase in early retirement disturbing for several reasons,0
public purchases of troubled assets are one possibility,3
more recently the stock market crash amply demonstrated the high level o f worldwide integration in money and capital markets,2
inadequate financial disclosure on the other hand could penalize wellmanaged firms or even countries if market participants do not trust their ability to assess firms or countries fundamental financial strength,2
theyve avoided debt and they havent dramatically increased taxes to balance their budgets,3
we have seen a sharp rise in bank mergers an expansion of branch systems and of overseas banking activities and a notable increase in the number of bankholding companies especially of the onebank variety,2
throughout his professional life the president understood the selfcorrecting   tendencies of free markets and the fundamental wealthcreating capacity   of capitalism,3
too often early childhood educationpurposeful structured curriculumbased learningis confused with childcare or daycare,0
the improved assessment of credit risk along with other advances in information technology also facilitated the broad development of markets in which individual loans are pooled and securitized thus allowing these pooled exposures to be priced in active capital markets,2
5 these unfunded obligations will increasingly work their way into the annual budget deficit over the next five to 10 years and will tend to increase the us budget deficit as a percentage of gdp,3
asset quality continues to improve and  lending activity continues to grow nationally,2
throughout the discussions and negotiations of basel ii the united states has emphasized that its interest is in ensuring that banks competing in each others countries be subject to the same capital regime,2
lending banks understandably do not volunteer to provide large interest subsidies for er to write down loans that can after all be serviced nor is that necessarily in the interest of countries that will be 1oo1d n9 to i ntern2t,2
while few land banks currently have the resources to operate at significant scale the land bank model is one that has shown some success and could help many communities stabilize troubled properties if used more extensively,2
in the recent cases we invoked the systemic risk exception with respect to the system as a whole thereby allowing assistance to flow to institutions of all sizes,2
over the past four years the aggregate tier 1 common equity ratio of the 18 firms that underwent the recent tests has more than doubled from 56 percent of riskweighted assets at the end of 2008 to 113 percent at the end of 2012in absolute terms a net gain of nearly 400 billion in tier 1 common equity to almost 800 billion at the end of 2012 indeed even under the severely adverse scenario of the latest stress test the estimate of these firms poststress tier 1 common capital ratio is more than 2 percentage points higher than actual capital levels at the end of 20084 higher capital puts these firms in a much better position to absorb future losses while continuing to fulfill their vital role in the economy,2
at the present time the budget deficit obviously is too high in the sense that it causes us to borrow heavily abroad as well as at home,3
foreign  banks can also operate in addition to subsidiary banks separate branches or agencies in various states,2
in the old days when individual loan officers made credit decisions any weaknesses in underwriting were confined to that lenders portfolio,2
for monetary policy this means pursuing policies that promote price stability,4
there is a broad class of market practices that can provide useful protections when an individual firm experiences trouble but these practices may not provide useful protectionsand could be potentially harmfulwhen the trouble is marketwide,2
a reduction in debt ratios seems entirely possible since it could be associated with an absolute increase in debt but at a slower rate than the scale variable,3
in 1901 colorado agricultural college frequently referred to as the cow college had about 200 students known as the farmers,0
even the latest regulatory innovation the 1988 basel accords riskbased capital modelwhich took so many years to gain broad acceptanceis completely inadequate as a gauge for determining capital requirements for many very large institutions,2
in some cases customers that are provided financial accounts quickly return to the cash economy,0
econanic recovery in our trading partners has lagged significantly in timing and anplitude behind growth in the united states thus their demands for imports also have grown slowly,1
that is we must wait maintaining our current stance of policy until we have achieved our goals,4
businesses sell to national and  international markets and must compete with producers throughout the world,1
a fairly substantial gap still   remains between the current level of mortgage interest rates and the average   level of interest on the outstanding stock of mortgages suggesting that   refinancings should continue at a brisk pace in the early part of this   year,0
and we will staff our cash operations around the turn of the year to make sure banks can obtain currency on a timely basis,2
in this sense the roots of the consumer age go back to 1776 for it is precisely the great technological developments combined with relative freedom of enterprise and trade which have enabled the ordinary consumer to enjoy material satisfactions that were beyond the reach of royalty in earlier epochs louis xiv did not have a tv,0
these misallocations of capital dont create the collective  mistakes in predictions that generate financial crises,2
overall the financial system was  vulnerable to shocks and unable to quickly move reserves to where they were  needed,2
a small number of large banks also enter the government securities market as dealer banks,2
recognition of the importance                            of global economic forces for the making of economic                            policy is not limited to monetary policy,4
this program will be distinct from the activities of supervisors so as to provide an independent assessment of the conditions in major firms as well as to provide additional information to onsite examination teams,2
1 the fsb exists to help sustain the common efforts made in the throes of the crisisto identify and address systemic vulnerabilities to develop stronger regulatory and supervisory policies and to create a more resilient global financial system,2
a historical comparison because we have so little experience with very low unemployment it is interesting to compare todays labor market with that earlier period,0
the federal reserves proposals for strengthening the community reinvestment act emphasize the value of banks providing costfree lowbalance accounts and other banking services targeted to underbanked and unbanked communities12 and a core goal of fednow is to provide ubiquitous access to an instant payments system via depository institutions,0
importantly the unemployment rate is about 10 percent now as compared with 312 percent last february,0
a downpayment on deficit reduction would of course be only a first step in dealing with the massive structural deficits that lie ahead,3
the information in the minutes or other aspects of the discussion at the meeting could give advantage to those who obtained this information before it was publicly released,4
1 if evidence suggested no problem we would support the repeal of laws that are onerous to banks,2
our decisions and how we react to the events now unfolding will not only determine the economic outlook for the immediate future but will influence the structure of our economy for yars to come,4
this fraction compares to just over onefourth of those who said they never or only rarely worried about these concerns as children that now experience this level of financial challenge,0
the statutory responsibility of the fdic extends only to the first 100000 of deposits held by a particular individual in all accounts at a depository institution,2
its important to note that many businesses are flush with cash and motivated to improve their efficiency while growing their markets,1
the administration claims that the budget is as tight as it could possibly be and spokesmen for the administration challenge critics to be specific about where the cuts should be made,3
this acceleration in the pace of accumulation could mean that inventories had finally gotten too lean and that firms wanted to restock or it could mean only that businesses were startled by the unexpectedly weak pace of demand for their products and that inventories piled up unintentionally,1
likewise the presence of governmentowned firms with a degree of monopoly power together with restrictions on the entry of new firms may diminish competitive pressures that often foster innovation and greater efficiency nicoletti and scarpetta 2003,3
as the basel ii implementation process moves along we look forward to gathering additional information and further enhancing our understanding of institutions practices,2
these authors calibrate a model in which an inflation rate of 3 percent allows most realignments of real wages to occur without reducing nominal wages,0
it has been an advantage to the bank and has enabled the bank better to serve its conmrunity,0
that is the protection from competition provided by interstate and intrastate barriers may have allowed some firms with market power to be inefficient or make uneconomic loans,2
however such actions might also have important social costs that need to be taken into consideration,0
achieving our objectives requires the utmost in diplomacy and rigorous analysis,4
  5    since those outside businesses were free o f the regulations limiting banks and thrift institutions they could o ffe r depositors market rates o f interest on funds placed with them,2
that is what the economy is supposed to produce and so long as it does so restraint on wage increases is justified,0
given what ive said so far though i hope you agree that id be crazy to make my policy position depend on whether a forecast is a few tenths of a percent higher or lower,4
a small number of key industrial price moves or high wage bargains can set off a rapid upward spiral of prices costs and wages,1
with this remarkable  shift from industry to services chicagos  economy has continued to grow on net adding nearly 400000 jobs in the past  quarter century,0
in considering how much to invest in their own cybersecurity each firm should be entertaining the possibility that those shared services could come under significant stress in the event of a major attack on multiple firms at the same time5 or that the shared service itself could be the entry point for a systemwide attack,2
the workings of a free economic system without direction from anyone solve the balance of payments problem,3
privatization of governmentowned industries has been accompanied by major issues of new securities,3
more cases like this as well as insights from more than 100 workforce development experts represent the bulk of a threevolume compendium titled investing in americas workforce,0
growth in construction spending by businesses was particularly strong in 2006 the gains were widespread in such diverse categories as health care facilities office buildings retail space and power generators,1
some institutions act as mortgage bankers screening applicants and originating loans,2
public discussion by policymakers of such potential hypothetical problemsconsistent with transparency nevertheless caused some in the bond market to purchase longterm bonds to get ahead of the fed,4
it could be that if markets remain relatively stable businesses may begin to feel more secure and investment spending may pick up more than expected,1
but what about the rights of the individual as against the monetary power of congress,0
in july 2007 the fed was holding less than 900 billion on the asset side of its balance sheet,4
the seven board members have a two  vote majority on the federal open market committee or fomc which is the feds chief monetary policymaking body,4
it is argued that these benefits give job searchers the ability to hold out longer for a good job and may in some cases reduce the intensity of job search,0
the strong demand for goods and services that we associate with prosperity causes wages to be raised not only in manufacturing where the increases can be offset in part at least by mechanization but in the service enterprises like stores hotels and hospitals where there is less chance for similar offsets,1
the regulatory system will operate more effectively if the supervisory process integrates market information which should as a result of innovations such as a resolution mechanism be even more sensitive to the conditions of financial firms,2
and because monetary policy decisions take some time to flow through to or have their full effect on the economy fomc participants must form a view about how they think the economy will evolve in the coming months and years,4
in the course of the current upswing the government sector through fiscal policy has played a sustaining role in implementing the expansion in demand,3
but even as central banks develop new tools to address new challenges they must continue to place great weight on the factors that have been shown to enhance the credibility and effectiveness of monetary policy central bank independence accountability and transparency and effective communication,4
monetary policy this brings me to a discussion of the recent policy actions the fed has taken why i dissented from these actions in august and september and what i believe should be the longterm view of monetary policy,4
induce or penalize bank credit for specified end users,2
and economists   4 generally agree that the current low savings rate is at least in part the result of government policiesthere are many forms of distortionsthere is also widespread agreement that there are numerous types of government tax and spending policies that distort behavior so as to adversely affect saving,3
take for example the civil service plan hiat plan carries a costofliving escalator and a similar notion will be added to social security benefits beginning in 1974if private and public policies are such as to lead to increases in wage rates faster over time than we increase productivity there is no practical alternative but an inflationary trend,0
i f we  count the number o f offices o f foreign banks edge a c t corporations loan production offices and other nonbanking subsidiaries o f banks and bank holding companies as well as grandfathered interstate banking offices that are operating across state lines the number o f interstate offices offering various types o f banking services totals almost 8000,2
the compression of interest   margins is alerting bankers to the fact that their ample supply of core   deposits provides a liquidity cushion that is fairly expensive in this   setting,2
the fomc also issued a statement regarding monetary policy implementation and balance sheet normalization which reflects our decision to continue to implement monetary policy in a regime in which control over the level of the federal funds rate is exercised via a socalled floor system with an ample supply of reserves,4
with the june 2015 summary of economic projections sep showing that 15 of 17 fomc participants judged that appropriate policy would entail an initial increase in the federal funds rate by the end of 2015 markets saw about a 50 percent chance that the first increase would occur in september,4
first i will consider the question whether new forms of electronic money will fundamentally alter the central banks role in the payments system potentially compromising its ability to conduct monetary policy,4
lawmakers in washington began this  process with mca 80 and the banking a ct of 1982 which together made the playing field increasingly shared by banks thrifts and nonbanks somewhat more level,2
it also remains to be seen whether the trend toward consolidation and layoffs in communication transportation and other professional and business services has hit bottom,1
i am not  referring to political orga nizati on in a narr ow party sense  but in the  larger sense of the body of ordinances  regulation  spawned the bewildering complex of state and  though  and statutes which have  local political entities,3
the idea was that online sales in many lines of business would turn out to be natural nearmonopolies,1
failures of depository institutions in the late 1980s and early 1990s restricted the availability of credit to many borrowers especially those that had traditionally relied on banks and sls,2
because of its support to aged people of all incomes poll after poll has indicated social securitys unique political popularity,0
i am more convinced than ever that financial markets  require a healthy dose of regulation to function efficiently,2
as many of you know the federal reserve has had for more than five years a program to foster our largest most complex banks2 ability to assess internal capital needs,2
industrial production rose significantly in the summer and not just for the auto industry which was effectively restarting after the disruption caused by the bankruptcies of general motors and chrysler,1
the quality of those explanations is a critical part of the policy process for good decisions and good explanations of those decisions help build the credibility of the central bankand a credible central bank is a more effective central bank,4
but i would note that consumption growth has not fluctuated that much over the course of the recovery,0
specifically i want to stress that this risk management or insurance strategy carries with it its own set of risks and must be used with some care,2
but more importantly i am enthusiastic because it gives the banking industry such a good chance to tell its story to the public,2
going forward until housing demand picks up and some of the inventory of unsold homes is worked off residential construction will continue to be a drag on economic growth,0
in contrast to conventional mortgage rates the inflexibility of fha and va rates has interfered with the smooth operation of mortgage and real estate markets,3
in particular the growth of the states electronics and  other hightechnology industries which have almost doubled their job requirements since early in this decade promises considerable strength as we move into the 1980s,1
summary and conclusions table 110 appendix table i appendix table ii 1 5 8 17 24 30 36 42   employment and income in the black community trends and outlook by andrew f brinnner i introduction during the last few years i have attempted to make at least an annual assessment of the economic progress of blacks in the united states,0
in addition households that have worked down debt levels will be less vulnerable and better able to withstand shocks in the future,0
using the kendrick data as a guide and recognizing that the choice of any particular period is somewhat subjective we take as the first episode of strong productivity growthor productivity boom if you willroughly the period from 1873 to 1890  during this period labor productivity rose more than 212 percent per year a rate thought to be considerably higher than the average growth experienced over the first 100 years of the united states5   an important element of the analysis of this and other periods is the decomposition of output per hour into its underlying sources including the contributions of multifactor productivity capital deepening and labor quality,0
this is critically important to increase banks certainty that they will receive cra credit when they make impactful investments that have the support of tribal governments and leaders and to increase certainty about how these activities qualify for cra credit,2
on the other hand  the outlook for our balance of goods and s e r v i c e s and government account does not look unfavorable,3
it is difficult to assess the exact extent to which increased demand by developing countries has contributed to the runups in commodity prices in recent years as these prices are also affected by supply conditions and other factors,1
the point of the policy action of course is to try to prevent any significant increase in core inflation,4
it has been reasoned that the accelerated expansion of total bank credit this year would supplement the funds available for spending by the public and therefore should be interpreted as a strong inflationary force in the economy,2
this format offers the possibility of limiting or even prohibiting the use of the insured bank for funding the other businesses thereby insulating the insured deposits of the bank from the real or imagined risks of the other businesses,2
let me also stress the need to continue to implement approaches that not only improve international accounting and audit standards but also encourage through the implementation and enforcement of these standards an enhancement in actual international accounting and audit practices,2
3  growth and sustainable profitability of rural banks are nearly  always a mirror image of the growth and prosperity of their community,0
and in fact recent research has found some troubling patterns many workers do not participate contribute only a small portion of their wages if they do participate and make questionable investment and distribution choices,0
should such runs occur they  could be handled both through approprlate openmarket operations to protect  the econonys llquldtty ln general and through use of the federal reserves lender of last resortrr facility to lend dlrectly to solvent banks,2
over time new issues of these securities became available on a regular calendar and market liquidity improved,2
corporations have issued bonds and paid off shortterm bank debt,1
my second principle is that the regulatory framework must recognize that it creates incentives for financial institutions their customers and the regulators themselves and that market forces are always at work,2
thus the federal reserve has not and does not pursue a policy that could be regarded as mechanical monetarism,4
in february the federal open market committee set the 1988 target ranges for growth of m2 and m3 at 4 to 8 percent,4
where these tax programs are inefficient unduly complicated or inequitable they should be modified or repealed,3
given that we at the fed are mandated to maintain price stability and create the monetary conditions to  encourage maximum employment growthat a time when inflation is somewhat  below what the committee as a whole judges appropriatei instinctively  understand the impulse to put the monetary pedal to the metal to try to move  the needle on employment growth,0
in addition to examining the effects of different monetary policies defined for the present purpose as different rates of growth in the money supply the effects of two tax policy instruments were weighed the 7 per cent investment tax credit and a 10 per cent income tax surcharge,3
however it is possible that some large banks may derive substantial deposits from local areas and concentrate their lending in national and international markets,2
some viewed the depression as the necessary purging of financial excesses built up during the 1920s in this view slowing the economic collapse by easing monetary policy only delayed the inevitable adjustment,4
for example tarullos 2012 discussion of limits on uninsured liabilities is not a rigid size cap since it does not constrain an institutions absolute size to the extent that it is able to adjust its funding mix,2
with the national recovery currently under way and a future based on industries that are well known to this region the future looks quite bright,1
undoubtedly the major negative is the downward pressure that rate deregulation is having on net interest margins,2
in just two months march and april 2020 the economy lost over 22 million jobs about the same number it had added over the previous 11year expansion,0
satellite television and the internet have heightened public awareness of conditions abroad educated citizens about financial opportunities elsewhere and raised pressure on politicians not to place limits on these opportunities,3
you can only answer this question by knowing exactly how much aid is provided to a lowincome student and whether a particular school has the resources to fully fund needbased aid,0
we are contributing to initiatives already under way at the local and national level as well as collaborating with other regulators community groups policy organizations financial institutions and public officials in an effort to identify ways to prevent unnecessary foreclosures and the associated negative effects on local communities,0
first financial markets can inform and in some cases complement the actions of the federal reserve by providing timely information about the outlook for economic activity inflation and the health of individual financial institutions,2
central bank communication and transparency are important precisely because of the role of privatesector expectations in determining the effectiveness of monetary policy a theme i have highlighted today,4
this is just part of their efforts to support community partnerships and help meet special community credit needsin addition to financing initiatives banks throughout the country are supporting a number of groups and services that strive to improve the availability of credit in low and moderateincome and minority communities,0
these changes in bank loans then spill over  via changes in the supply of bank credit  into general  changes in credit conditions and interest rates,2
db plans which are more common in older and larger firms promise workers a stream of benefits during retirement and companies that sponsor them are required by law to set aside sufficient funds to cover the payments they have promised to their workers,0
managements ability to underwrite the credit initially manage changes in credit risk over the life of the loan and limit losses of principal and interest and collection costs should a default occur are key drivers of credit costs,2
e arrange to handle the credit needs of the large efficient producer the alternative is for the bank to become a wholesaler of funds by purchasing the credit instruments of others who are better equipped to do the job,2
a necessary condition for cra to prove beneficial is the existence of some or all of these types of distortions either in mortgage lending or in business development lending,0
8we also are hearing some limited reports of cutbacks in construction lending to some builders as a consequence of the new regulatory standards for savings and loan associations,2
the higher and more frequent level of borrowirg at the discount window i might ad9 reflects not only the general bank scramble for funds but also the shifting of pressure to more banks as alternative sourceg of funds become less available,2
the new guidance provides a general description of the framework that the fomc will apply in making decisions about the timing of liftoff,4
this type of performance positions the community banking sector for continued success this year and well into the future helping ensure the preservation of the community bank model for future generations of americans,0
well consider the task of                            the central banker seeking to conduct monetary policy                            to achieve maximum sustainable noninflationary growth,4
some industries will inevitably operate for a time at lower rates of production than they would prefer,1
given the ease of transfer the threat of even a small loss will cause depositors to run,2
that is to say if there are private lenders on any scale the official lenders will insist that the general conditions be imposed universally,2
first ill discuss why i think transparency is important,4
we are going to have  to feed these people clothe them educate them travel them recreate them and meet their demands we have not yet dreamed of,0
thus formal loan commitments combine with the inducements provided by a network of customer relationships and the high profitability of business loans to make extremely difficult if not impossible the decision to rechannel already reduce supplies of lendable funds into assets other than credits to business firms,1
the important requirement is that the level of savings including that produced by the governments surplus or net lending equalsthe desired level of investment,3
in the process many ndividua1s and coipanies are disappointed that they cannot secure the funds to buy what ther want right away,1
the 10year treasury yield did not fall below 10 percent until november 1985  remarkably 30year treasury yields were only slightly lower than 10year yields throughout the episode implying that the markets had no confidence that inflation would ever return to 1950s or 1960s levels,3
as you know all too well many innovations that appear to have great promise fail in the marketplace while others succeed,1
however for gas transmission companies the reverse is true,1
thus he knows  how much to mark up each item in order to realize a profit i use a supermarket manager as an example of a businessman at work because todays commercial bank is often referred to as the supermarket of finance  wow lets see if the managers of these financial supermarkets are as  familiar with their stock in trade as are the managers of the food supermarkets,2
an advantage of our current framework over makeup approaches is that it has provided the committee with the flexibility to assess a broad range of factors and information in choosing its policy actions and these actions can vary depending on economic circumstances in order to best achieve our dualmandate goals,4
far too many of us say to them cut  the federal deficit but dont reduce our favorite expenditures or raise our taxesi,3
a 20 percent reserve requirement has been placed on member bank balances above a specified base for certain eurodollar borrowings,2
we heard that traditional bank lending still exists based on the soft information obtained from close borrowerlender relationships that generate not only credit today but also future business activity,1
these promises good in ordinary times became onerous and hard to meet in the months of monetary restraint last year,4
for every dollar of preclf shortfallthat is for every dollar of required liquidity that a bank cant obtain on the private marketthe bank has to pay the commitment fee,2
still by 1960 the ratio was about 5 to 1 at the end of last year it was 33 to 1 and in 2030 when the last of the baby boom generation reaches retirement age it will be around 2 to 1 unless we change the social security program requirements supporting these retirees will require enor mous revenue,3
aside from protecting jobs and whole industries from import competition some advocates o f protection feel we need to use such measures as a bargaining chip to open foreign markets for us exports,1
this will require steady discipline when implementing monetary policy,4
in the preceding decades our regulatory system had accommodated the growth of capital market alternatives to traditional financing by relaxing many restrictions on the type and geographic scope of bank activities and virtually all restrictions on affiliations between banks and nonbank financial firms,2
considering that investment decisions are framed in part against calculations as to whether interest rates will tend to become more or less attractive for investment purposes it follows that a change in the federal reserve bank discount rate has great significanceo the reason for this is that mere a change in the discount rate brings it into line 1dth a past movement of other market rates of interest a kind of official confirmation is given that the federal reserve system recognizes the validity of the existing interest rate structure both as the product of its own monetary policy and of market influenceso a change in the discount rate thus acts as a sort of green light to go ahead with investment actions that otherwise might have been held up pending clarification of interest rate conditionso a change in the discount rate can also be made as a red light to advise investors of some marked shift in economic conditions which they should pause to considero a change in the discount rate on such occasions generally has the characteristic of leading rather than following the market movement of interest rates,4
technology has changed how we do our jobs how we recruit for workers and how we search for new positions,1
the broad responsibility for achieving maximum employment seventyfive years ago in the wake of wwii the united states faced the challenge of reemploying millions amid a major restructuring of the economy toward peacetime ends14 part of congresss response was the employment act of 1946 which states that it is the continuing policy and responsibility of the federal government to use all practicable means,0
but given the detailed nature of the microdata that are available on individual fund holdings and returns there is clearly room to make significant further progress on this front,2
first a state is seldom the appropriate market area to use in considering whether concentration of banking resources is or is not excessive,2
what is certain however is that the committee will respond to changes in the outlook as needed to achieve its dual mandate,4
in the united states for example the share of both imports and exports has grown substantially over the past forty years,1
moreover to date announcing that we expect to remove accommodation at a measured pace has not materially impeded market participants from responding meaningfully to incoming data primarily by extending the anticipated series of gradual rate increases when these data suggested the potential for greater inflation pressures,2
in other words 30 percent of a typical organizations workforce has three years or less experience with that fir m so ever y organization needs to hire new staff who reflect attributes needed in the desired culture and who can ser ve as ambassadors of change,1
its too early to assess their ultimate impact on the lending industry but its possible that these new nonbank lenders will become important players in some markets previously dominated by banks,2
thus disruptions in financial markets can generally be addressed using the tools available to the federal reserve without necessarily having to make a shift in the overall direction of monetary policy as measured by the federal funds rate,2
lack of this information made it more difficult for regulators to decide whether and how to intervene,4
therefore the results of policy will be maximized if the longrun monetary needs of the economy are determined and then provided month by month and year by year,4
since this sort o f macroeconomic growth will require a stable as well as a highly developed and responsive financial system we will probably experience some changes in the regulatory environment to ensure the continuing soundness o f our financial system,2
the latter rises could  either indicate that inflationtargeting regimes became less credible or simply reflect the fact that world interest rates were rising at this time,4
while the recent  recession prompted households and businesses to reduce their debt levels there was no such reduction in the burden of accumulated federal debt,3
for example in the united states the regulatory framework that came out of the doddfrank act ensured that systemically important institutions entered the pandemic with sufficient capital to facilitate the forbearance and lending that has been critical to our economic recovery12 the question before us now is what can we learn from the events of march 2020 and how can we use those lessons to build a more resilient financial system moving forward,2
current expenditures of state and local governments hc1ve risen greptly and have required more taxes returns from only certain kinds of taxes have increased automatically with the growth of the economy and it has proved difficult to keep the tax bases current both population growth and population movement have aggravated the problems of some governmental units,3
each of the 12 reserve bank presidents brings information about his or her region to the monetary policy process,4
for the 20 years before the crisis the 10year treasury yield averaged about 6â14 percent compared with recent readings around 3 percent,3
i hasten to add however that the prospects of any significant or pervasive tariffsand the reactions from trading partners that could followrepresent a counterbalancing downside risk,1
the result was a disincentive to produce and this of course led to a reduction of available supply and an even higher price to the consumer when controls were removed,1
we supervisors will be appreciably more involved      in evaluating individual bank risk management processes than      afterthefact results,2
thus when the dollar deprec icites the cost of imports rises initially and the trade balance weakensadjustment of the us external deficit on the one hand and the japanese and german surpluses on the other should occur without imposing undue strains on other countries involved in the multilateral trading process,1
hearing panel decisions may be appealed to the exchanges  6board of directors to the securities and exchange ccamission and ultimately to the federal courtsthe 1975 amendments to the securities and exchange act considerably enlarged the secs role of oversight while still leaving the bulk of daytoday regulation and surveillance in the hands of the industry,2
in addition central banks should use information from various price indicators to tell them whether the economy is overheating or running well below productive capacity,4
it provides justification for the behavior of those central banks that think and talk of monetary policy purely in terms of the policy interest rate and other financial return variables but not of the money stock,4
second once the pricelevel target was reached or nearly so the objective for policy would become a conventional inflation target or a pricelevel target that increases over time at the average desired rate of inflation3  although restoration of the predeflation price level by means of a pricelevel target might be a reasonable interpretation of the bojs price stability objective i would not want to push the purely legal argument too far,4
note that by systematic policy i do not necessarily mean that monetary policy be set mechanically by a policy rule,4
some might argue for example that actions  taken by the fomc this year which have resulted in inceases in shortterm interest rates of approximately 250 basis are anything but conducive to these activities,4
financial holding companies will be as central to banking tomorrow as good oldfashioned banks were in the passbook days we talked about earlier,2
companies often use key risk indicators and key performance indicators to facilitate this communication,1
the unexpected and rapid rise in energy costs sapped consumer purchasing power and reduced business profit margins,1
in addition however many banks also seemed to have accepted an obligation to assist their own state and local governments with their financing problems and this willingness to assist was frequently enhanced by the deposit of public funds,2
by outlining how we use estimates of risk          premiums and the complications we have encountered i hope i have given          you a sense that we are a ready market for work that improves our understanding          of the topic,2
but the opportunities for profitable exploration and development in the industrial economies are dwindling and the international oil companies are currently largely prohibited restricted or face considerable political risk in investing in opec and other developing countries,1
many of these surveys note that it is very difficult for outsiders to determine the effectiveness of corporate governance,1
even if businesses do not like the rules  that govern their behavior knowing those rules with certainty gives them something  to plan around and navigate through,1
the classic barrogordon dilemma is that discretionary policy setting by benevolent central bankers who seek to bring unemployment below its sustainable natural rate11 level tends to lead to abovetarget inflation,0
mr bernard norwood and mrs helen b junz respectively provided valuable counsel with respect to u s trade policy and the use of imports by foreign governments to strengthen general stabilization policies,1
2 in other words each bank is required to model its total outflows over 30 days in a liquidity stress event and then to hold hqla sufficient to accommodate those outflows,2
but the notion that constitutional restraints are the 1 this possibility is in addition to the increase in the tax base in income tax states which permit federal taxes as a deduction in computing taxable income,3
a reasonable guess is that the workweek will continue to fall at its historical average rate of about 14 percent per year,0
people sometimes assume that the fed worries more about inflation being too high than too low,4
this is another reminder of the importance of building resilience in the financial system,2
we believe that policy decisions in the public interest rather than in the private interest will lead to a healthier and fairer society,0
the board of governors heads the federal reserve system and the boards members are appointed by the president and confirmed by the senate,4
examining such processes became more necessary after we recognized years ago that the widening use of derivatives enabled an institution to substantially change its risk profile within hourspossibly shortly after the conclusion of an examination,2
the grammleachbliley compromise was to require some separation of financial activities into different subsidiaries of a common parent the financial holding company,2
chart changes in returns on farm capital specified types of commercial farms by size d marginal capital invested in real estate apparently yields greatest returns,1
finally a leverage ratio leans against the inherent tendency of bank leverage to increase in an economic boom and fall during a recession,2
by allowing institutions to diversify risk to choose their risk profiles more precisely and to improve the management of the risks they do take on they have made institutions more robust,2
i am referring to the advance notice of proposed rulemaking issued last october by the us banking and thrift agencies that explores alternatives for simplifying the capital standard for noncomplex noninternationally active us depository institutions,2
whenever representatives of the press attend i try to spend a considerable amount of time talking with them in small groups or individually before or after a speech,4
so what does greater efficiency in the allocation of risk have to do with monetary policy,4
3  on balance then these factors just reviewed combined to produce another year of moderate economic growth that not only lifted incomes but also provided over two million new jobs,0
ideally  this means it must be their judgment in the main where and  how they obtain funds and where and for how much they loan these funds,2
we hope that by clearly communicating expectations we are giving          both bankers and our own examiners sufficient time to prepare for the          new framework,2
this  means that our nation must continue to bear a heavy burden of military and economic aid,3
this is nearly a full percentage point lower than the wage gains we saw before the financial crisis,0
in the meantime we must bear in mind that the statistical relationships we work with embodied in our econometric models are only loose approximations of the underlying reality,4
this leaves the many who subscribe to the efficacy of monetary policy on faith prepared to believe and contend that monetary policy supplied a necessary ingredient if not the one which actually precipitated the desired economic effect,4
sometimes additional observations can be found that discriminate between contending theories but if not policymakers may be forced to choose between competing theories,4
until the new technologies came along and still today at many banks choices about portfolio risk were the outcome of internal debates and struggles between those wishing to push the boundaries of prudence in search of shortterm volume and those who saw the risks clearly,2
but as chairman volcker told the senate banking committee  several weeks ago reserve requirements must be more equitably distributed among the nations banks even though the federal reserve can meet its responsibilities with a smaller reserve base than it now has,2
this may shock you if you havent thought about it before but progress can  best be measured by job losses not job gains,0
it typically involves wellqualified teachers small classes a researchvalidated curriculum and familysupport services,0
because the term premium effect depends on both the federal reserves current and expected future asset holdings most of this effectwithout further actionswill likely wane over the next few years as the effect depends less and less on the current elevated level of the balance sheet and increasingly on the level of holdings during and after the normalization of our portfolio12  the rationale for highly accommodative policy i have already noted that in my view an extended period of highly accommodative policy is necessary to combat the persistent headwinds to recovery,4
like their  counterparts in the rest o f the united states southeastern farmers have experienced difficult years during a period when the economy as a whole has enjoyed a continued expansion,1
we have already done so in the case of europe where last months data showed a small us trade surplus,1
to the average citizen this line of reasoning seems very plausible and is very appealing because it is easily understandable,0
good communication by the fed should help members of the fomc interpret market prices,4
despite the exceptionally large extraction of equity the total remaining equity at the end of 2002 was higher in dollar terms than at the beginning of the year owing to a 7 percent increase in existing home prices over the four quarters of last year and 300 billion in new home construction net of mortgage extensions on those homes,0
related to concern about adverse distributional effects of trade is the view that trade is disruptive,0
this allows the fir ms to minimize costs and leverage strong brands enhancing their marketability,1
the head of the  european central bank jeanclaude trichet said it best recently while  speaking in germany monetary policy responsibility cannot substitute for  government irresponsibility5 the  entire fomc knows the history and the ruinous fate that is meted out to  countries whose central banks take to regularly monetizing government debt,3
but there are other reasons to favor free enterprise than the oppor tunities i gives for personal gain,1
the dynamics of this whole area are impressive and i suspect this organization plays an important quality assurance role in this local business economy,1
w no e  longer try to constrain shortterm fluctuations in interest rates,4
another important condition to our survival as a free nation is the maintenance of a sound but flexible monetary system,4
as a result systematic policy promotes a more stable predictable and efficient economy,4
next the ecb reviews developments                            in commodity markets and discusses the outlook for the                            external environment,1
in one sense the figures can be interpreted as indicating the extent to which the banks choose to service their foreign customers from their domestic offices as opposed to their foreign branches,2
the large increase in the college premium has led many policymakers and educators to advocate college for all,0
in the 198889 period the southeasts rate of employment growth fell behind the nations for the first time in many years,0
to forestall this risk some observers recommend  that the fomc begin to raise interest rates soon so that the path of interest  rate increases could be more gradual,4
for the most part we in the united states have not engaged in significant          and widespread protectionism for more than five decades,1
in essence the bank should determine whether capital          levels are appropriate in light of any deviations from pillar 1 assumptions,2
however one overriding conclusion stands out us banks became much more heavily engaged in foreign lending relative to the rest of their business in the last decade,2
we are still in the process of completing the installation of our new highspeed wire network linking all 43 operating federal reserve offices including new federal reserve clearing offices,4
there will continue to be many onebank towns and most of these will be served by unit banks,2
stakeholders â including banks fintech companies consumer groups regulators and others  answered our call to action signing up for two task forces convened by the federal reserve,2
there is a real need however for men specially trained in this such training should include a broad training in production agriculture d an farm management,1
we in the federal reserve are taking this opportunity to reflect on our past both the successes and the improvement opportunities and to make our history more accessible to the public,4
today only eight states across the us require personal finance before middle or high school graduation,0
c unemployment should hover within 1995s range of 54 to 58 percent,0
particularly in a crisis a central bank without knowledge of the way markets actually operateknowledge that can gained only by experience and handson contact with banking organizationswill be if you will excuse an exprofessors metaphor at risk of failing its final exam,2
the seriousness of the unemployment problem stems not from this having been an especially severe recession in terms of its effect on employment but rather from the fact that unemployment was at a high level about 5 per cent of the labor force even before the downturn began,0
depreciation of the value or their holdings of deposits ano currency savings bonds and other debt llould hurt farmers as much as depreciation in the value of their own debts night help them,1
no social security funds are being stolen the fund is making loans and getting full interest on these loans,3
this needs to be accomplished in a way that does not give the bank ceo another form to fill out and does not raise the prospect of retribution by the examiner the next time around,2
one of the key messages we repeatedly heard from experts throughout our initiative is the need to understand both costs and benefits when considering potential regulatory reforms,2
secondly capital enables the bank to absorb unforeseen losses or reductions in asset values in excess of earnings in order to continue as an ongoing concern in the short run until earnings recover,2
the ratio of liquid assets to shortterm liabilities has declined from 594 per cent in 1950 to 236 per cent at the end of 1974 relative to corporate gross product liquid assets equaled 152 per cent last year as contrasted with 266 per cent in 1950for a long period this reduction in liquidity probably reflected a deliberate policy aimed at profit maximization and encouraged by the tax law,2
however the term money market borrowing by banks that underlies us dollar libor has experienced a secular decline,2
large banks have increased both the size and quality of their capital buffers the ratio of common equity to riskweighted assets at large banks has increased by half relative to the precrisis average,2
return to text  20 in the case of trust lands the united states holds the legal title to property and the individual indians or tribe holds the beneficial interest,0
for example the enterprise risk management framework of the committee of sponsoring organizations of the treadway commissionthe socalled coso standarddoes not address reputational risk,2
the fomc meets in washington dc generally eight times a year,4
that questionnaire was really comprehensive  so much so that when i started asking our staff for suggestions for this talk they almost invariably threw ip their hands and said but mr livingston covered everythingnhowever sometimes adversity creates opportunity and reflection revealed that mr livingston had been looking  as all of us do most of the time  into the field on the other side of the fence at the problems in the supervised banks,2
a reserve bank is governed by a board of directors subject to general oversight by the board of governors and the requirements imposed by congress in the federal reserve act,4
jumptarts mission to develop a more financially literate population supports the federal reserves goal of a stable and growing economy,0
we experienced a pronounced and very welcome bounceback in national retail spending and housing activity over the early summer months,0
it would not be difficult to show that these relationships depart from those which would be considered desirable for a financial system that functioned well,2
at the same time banks clearly differ from other types of business enterprises and require different treatment in matters of disclosure,2
all of these are important but none of them singly or together could have produced the flowering of civilization without the development and acceptance of the rule of law,3
here though we could likely keep inflation in check with moderate increases in interest rates,4
federal reserve banks around the country will also continue their cooperation with educational and community organizations that provide counseling about mortgage products and the responsibilities of homeownership,0
and it is also understood that the federal reserve stands ready to channel funds through depositories to nonbank borrowers in extreme situations that threaten to carry repercussions throughout the financial marketsas in the case for example of the penn central bankruptcy a decade ago,1
we did not attempt  to recommend a precise percentage but we did point out that the present average ceiling for banks of 2 j3 per cent is grossly inadequate that the economic welfare of the country demanded a measurably higher figure but that we did not believe that either the commercial banks or the savings and loan associations could justify a figure as high as  12  per cent,2
in major industrial countries bond yields have trended down in some cases reaching historical lows recently,3
second all federal supervision of banktype institutions should be consolidated in one independent agency,2
the respect for the thoroughness and objectivity of the research that wright oversaw led to the dismantling of damaging trade barriers in the 1890s and later raised public awareness about the deplorable conditions faced by women in the workplace,0
both laws establish a framework for reporting regulating and clearing otc derivatives transactions call for international coordination and emphasize enhanced risk management standards for ccps,2
                            related                       multimedia download mp3   early next year we will experience an event that happens rarely in the federal reserve  the retirement of the chairman of the board of governors,4
our analysis did not find a consistent relationship between cra ratings and a uniform comprehensive ratio that adds together all of a banks craeligible activities in an area,2
is it because of deteriorating economic conditions or a limited supply of workers,0
fourth monetary policy has bee applied to try to bank the fires of inflation and low down the eco omy without carrying our nationinto a serious recession which woul carry with it tremendous human suffering and very little longrange impact in terms of correcting policy,0
some of the improvement in financial conditions among businesses is due to significant belttightening by many firms,1
the corrective actions that the mortgage servicers are undertaking pursuant to the enforcement actions in an appropriate format also need to be shared with the public,2
they have reduced or  eliminated numerous restrictions on the mobility of credit things like usury ceilings,2
4still the central bank which is an outsider of sorts in the united states at any rate must make judgments about bank liquidity no matter how difficult or untractable the problem because of the implications for monetary management,2
therefore banks should not be surprised by the emphasis of the proposed guidance on the importance of portfolio risk management and concentrations,2
in assessing the actual strength of the labor market and the broader economy we must bear in mind that these very welcome improvements have been achieved in the context of extraordinary monetary accommodation,0
in my view the performance of the  labor market in 2014 has large consequences for how the fomc should interpret  this congressional mandate,0
misinformation  deceives  market  participants and more  importantly it fuels adverse social and political reactions that tend to impede the implementation of sound monetary policy,4
i3ut to an imlortont degree these benefits stem from a wide range of governmental policies policies designed to encourage savers confidence in the stability of the value of their savings policies designed to encourage the confidence of savers in the solvency of savings entrusted to financial institutions and policies designed to foster competition among institutionscometition for both savings inflous and investment outlets,3
perhaps one could think of a consensus loss function or at least of one that would be pareto optimal as between two disagreeing groups,4
therefore the market for fixedincome securities appears to be functioning in a way that one might describe as more discriminating,2
the present difficulty of many wheat farmers and cattlemen is in no small measure due to the unwarranted optimism generated by the unusually good weather and abnormally b h,1
housing is a local business,0
however the completion and issuance of reports would occur through subcommittees of the board of directors,4
the federal reserves credibility would also be enhanced  and skepticism reduced  if it were to announce a target path for the price level and then clearly articulate to the public its plans for achieving that goal,4
at that time a paperwork crisis was overwhelming    the financial markets as the rapid growth in financial activity outpaced    the systems ability to clear and settle financial transactions and    payments using traditional manual processes,2
money market funds to a very considerable extent at least are dealing with smaller amounts of money from individuals which are not encompassed in this managed liability concept of banks,2
too many of my fellow economists are largely indifferent to economic education for the general public,4
similarly the workers who choose to use these services are likely to be different from those who do not,0
but those unregulated and less heavily regulated entities generally are subject to moreeffective market discipline than banks,2
world trade has heen increasing in recent years and every indication is that it will increase even further in the future,1
however if the supervisor were required to define the exact degree of risk in each kind of loan and investment  assuming he could do it  capital adequacy might soon be a matter of arbitrary public rating for all banks and then a ratio would be a determinant of your banks standing irrespective of the quality of your managementbefore i leave this aspect of your role i want to make one last comment,2
and second what do the crisis and our response imply for the monetary policy tools of the federal reserve,4
to further ameliorate the toobigtofail problem the congress should create a new set of authorities to facilitate the orderly resolution of failing systemically important financial firms,2
but the nation ate up much of its seed corn in reaching its higher standard of living,0
the fiscal package includes tax cuts to bolster household incomes new infrastructure investments and financial assistance to state and local governments many of which would otherwise have had to cut spending in light of declining revenues,3
for market discipline to be effective we will need to give greater weight to taxpayer risk in making individual loan decisions even in  indeed particularly in  cases where a bank is both troubled and very largeimplications for discount window administration,3
6so much for  very briefly put  some of the complications for monetary policy of banking deregulation the future coalescing of commercial bank and savings institutions and the rapid massive innovations in the way money and credit can be held and usedi want now to turn to my second and related subject changes that have been made in recent years and others that are being put forth or considered in the relationship of the central bank to the congress  which is the central banks creator and to which the central bank is subordinate,4
3  f  the provision of merchant and dealer  credit must be made on an efficient basis,1
but before i do i need to give the standard fed disclaimer that the  views i express are mine alone and do not necessarily reflect those of the  federal open market committee or anyone else in the federal reserve system,4
this provision reads the congress shall have power ,3
however as economic and financial integration proceeds the defacto exercise of national sovereignty in economic and financial relations becomes more constrained one may well argue that once full economic union is achieved and capital and labor are free to move across national borders the incremental loss of national sovereignty due to the adoption of a common currency is minimal indeed,3
by the mid1970s this task force had expanded to include the federal reserve board frb the comptroller of the currency occ and the federal deposit insurance corporation fdic,4
demography also plays a role since age determines benefit eligibility for many programs and there are more and more old folks around,0
my own assessment as presented in these remarks can be sutllidarized briefly   the policy of monetary restraint followed since late last year has resulted in a noticeable moderation in member board of governors of the federal reserve system,4
given the important role played by financial market infrastructures we support the current legislative provisions that would help ensure that payment clearing and settlement systemsincluding central counterpartiesare subject to robust and consistent riskmanagement standards and do not pose dangers to the financial system as a whole,2
however most participants judged that given the diversity of their views about the economys structure and dynamics it would be difficult for the committee to agree on a fully specified longerterm path for monetary policy to incorporate into a quantitative consensus forecast in a timely manner especially under present conditions in which the policy decision comprises several elements,4
but accommodative monetary policy that lifts economic activity more generally is expected to increase the odds of good outcomes for american families,0
under the present erm currencies are allowed to fluctuate within bands of 2 to 6 percent and swings of this nature still carry considerable uncertainty for those making business decisions,1
the consumer price index was 3 percent or below for the fourth year in a row and unemployment was at its lowest sustained level in five years,0
that more relaxed attitude toward risktaking is what underlies the term moral hazard,2
let me conclude by returning to the occasion of this conference and what i believe it says about the federal reserves commitment to supporting the ongoing role of community banking in america,0
the incoming economic data have been admittedly mixed since the momentous december meeting of the fomc the meeting at which the committee raised its policy rate for the first time in almost a decade,4
an emerging body of empirical work finds that an easing of monetary policyeven via conventional policy tools in normal timestends to reduce both the term premiums on longterm treasury securities and the credit spreads on corporate bonds17 that is monetary policy always tends to work in part through its effect on capital market risk premiums perhaps through a risktaking or reachingforyield mechanism18           however while this empirical observation sheds some interesting light on how monetary policy influences the real economy it does not by itself suggest that there is any financial stability dark sidethat is any meaningful increase in what i have been calling fmvto the lowered risk premiums that go with monetary accommodation,4
in this program the role of monetary policy is perfectly plain,4
in reaching a consolidated assessment we will rely heavily on the functional regulators analyses of the capital adequacy of functionally regulated subsidiaries,2
your deposit in the bank may be safe but the banks risktaking may hit you in your wallet as a taxpayer,0
despite the significant efforts of native banks cdfis and credit unions for many native americans banking and credit access remain challenging,0
third some savings banks and s  ls are beginning to provide the convenience of onestop service for their customers,2
such customers often have maintained large deposit balances while previously requesting little in the way of loan accommodation,2
recognizing the spreading disease president carter issued an executive order on improving government regulation,3
proxies are needed either to estimate the natural rate or to indicate when the natural rate differs from the market rate and thereby signal when monetary policy is easy or tightassuming a fixed exchange rate regime wicksell claimed that the spread would disappear as the central bank raised the market rate in response to reserve drains,4
at the federal reserve we are doing everything we can to keep the playing field level as our policies and regulatory practices evolve with the industry,4
the fed along with state authorities supervises state member banks that is statechartered banks that are members of the federal reserve system,4
the unemployment rate which stood at 36 percent in april has been interpreted by many observers as suggesting that the labor market is currently operating beyond full employment,0
i learned about the key role that community banks play in helping small businesses get started and flourish,1
over the past decade withdrawals of passbook savings from thrift institutions have been as widespread as withdrawals from commercial banks,2
diminished demand for loans and bonds to finance highly leveraged transactions has increased some banks concerns that they may have to bring significant quantities of these instruments onto their balance sheets,2
the rrost encouraging sign i have seen is greatly enhanced management focus on the vital documentation of policies and controls in  3credit extension and asset acquisition and on the three rsreview review and review,2
p  at this point youre probably sympathizing with harry truman who asked to talk to a onearmed economist who wouldnt say on the one hand this and on the other hand that,4
in its first implementation of revised section l½ c 8 of the act the board expanded the scope of those provisions to include subsidiaries of holding companies approved by the board under that section,2
thus we have deferred essential changes that could have helped cushioned the economy against the inflationary implications of labor shortages,0
put more generally we in the federal reserve look first and foremost to our public service responsibilities in deciding what our role is and should be as an operator in the payment mechanism,4
usiness finance 5 despite the general slowdown in the economy business firms raised a substantial volume of funds during the first half of 1967 while the need for funds for inventory investment and for new plant and equipment declined since the start of the year internally generated funds retained earnings plus capital onsumption allowances also fell,1
but in the area of trade our confidence must be waning,1
did someone say cocacola,1
while our monetary policy actions can make a contribution a more robust recovery requires resolving problems that are beyond the control of monetary policy including addressing our countrys fiscal challenges and the situation in europe,4
laws and regulations no matter how  well thought out are proving to be flimsy indeed when pitted against market forces that push money flows into their most profitable uses,2
with a growing economy and the feds longterm asset purchases coming to an end now is the time to contemplate restoring some semblance of normalcy to monetary policy,4
that effort blossomed  into a major commitment that has continued through the development of a model  tribal secured transactions law in 2005 and continues today in further work  with tribes and the uniform law commission toward a model tribal probate code3 to  complement the commercial law initiatives we helped organize indian business  alliances in several states so that indian business owners and others can  advocate for good business laws and address financial and other barriers to  business development on reservations,1
for the remainder of my remarks i will focus on my vision for creating pathways to responsible community bank innovation,0
as we get more precise in measuring credit risk we lose some of the buffers previously built into the standard to cover operational and other risks,2
in a second area the board has sought to insure the continued smooth functioning of the payments mechanism over the longer term through the establishment of regional check processing centers designed to speed up the flow of checks,2
i am sure it is not lost on this group that more than 75 percent of these new banks were statechartered institutions,2
more accuratelyit is not one bank but twelve federal reserve banks and the board of governors in washington,4
the government permits a remedy for the fonner through lifo but not for the latter,3
2  in negotiating wage rates the craft unions must balance their members desires for both secure employment and attractive wages,0
the antispeculative policy tightening of 192829 was affected to some degree by the developing feud between strongs successor at the new york fed george harrison and members of the federal reserve board in washington,4
by the same token would it be wrong in some moral or ecoomic sense for  citibanks shareholders to also own a life insurance company an investment banking company a computer company and a real estate development company as long as citibank itself was insulated from whatever additional risks might exist in those other businessesthis issue of commerce and banking will also arise because of the recent history of the thrift industry where the ownership of thrift institutions by insurance companies and industrial and commercial enterprises is well established,2
first banks increased their offbalance sheet activities and although these activities such as issuance of standby letters of credit increased risk the capital standards did not require increased capital,2
moreover as demonstrated by the intervention of the government when bear stearns and aig were failing and by the aftermath of lehman brothers failure the universe of financial firms that appeared toobigtofail during periods of stress extended beyond the perimeter of traditional safety and soundness regulation,2
a more useful question for debate regarding monetary policy thus far in the 1960s is whether a still easier policy might not have speeded up economic expansion in 1962 and 1963before the tax cut was enacted,3
if corporate tax rates are lower in continental europe us businesses have an incentive to locate their profit centers abroad and to store their foreign earnings abroad too,3
i have a notion you might feel shortchanged if coming from the federal reser ve i didnt discuss the economic outlook especially in light of our recent monetar y policy decisions,4
the federal reserve itself is not immune from these problems as evidenced by its recent announcement that it will be closing 13 checkprocessing operations across the country affecting 1300 jobs,4
since employment lags behind gross domestic product gdp and many businesses are     2 consolidating i think the jobless rate will remain pretty much unchanged from the average last year of 67 percent,0
there are some current proposals affecting banking that  fall into a different category,2
yet more than a few observers have suggested that the fomc should  raise its target range for the fed funds rate soonpossibly as soon as june,4
not only would that increase the moral hazardand the need for banklike supervisionbut it would also unbalance the competitive playing field between bank subs and independent firms engaging in the same business a strange result for legislation whose ultimate purpose is to increase the competition for financial services,2
many community college students also face obstacles such as inadequate academic preparation or the need for child care or transportation,0
federal reserve independence from the executive was reasserted in 1951 however when the treasuryfederal reserve accord freed the board from an obligation to support the government securities market at unrealistic interest rates,4
while jobs growth has been impressive wage growth has been modest over the full period of recovery,0
2 the consumer and community affairs div ision at the chicago fed produces annually the small business lending profile which tracks aggregate lending data by the five largest msas in the seventh federal reser ve district,1
what does this mean to the banker,2
investment in nonresidential structures such as office buildings and industrial and commercial space appears poised to improve this year after several years in the doldrums though a full recovery in this sector will have to await further declines in office vacancy rates and increases in factory utilization rates,1
completing the picture the us banking system is highly profitable and wellcapitalized and has managed credit risk over the latest cycle exceptionally well,2
and recent data on household finances indicate that those living in our region are not facing any unusual difficulties servicing mortgages or otherwise meeting financial obligations,0
what then is the point of these  speeches,4
earlier i observed that the current vitality of the southeastern economy is based largely on buildingrelated industries,1
11 as previously segregated hotels and motels become open to negroes more and more conferences and annual meetings move from the segregated negro hotels in the ghettos to the choice places downtown,0
instead my goal is to describe the federal reserves monetary responsibilities highlight the critical role of liquidity in financial markets and discuss the recent financial market turmoil,2
unfortunately despite its central role there is a problem with bank regulatory capital as we know it,2
without claiming that the fed ever had the only game in town i do not feel that it is exaggerated to say that in any ranking of the arms of government according to their inflationary propensities the fed comes at the bottomlet me examine some aspects of lipseys distinction between active leadership and passive validation,4
we look at how many net new jobs were created,0
for instance finding the wherewithal to buy a home or a new car has become a more difficult task for many young families,0
i will next discuss how the committees conception of its maximumemployment mandate a sixth element of the new framework has evolved since 2012 what this evolution implies for the conduct of monetary policy and how i plan to factor in this information as i think about the appropriate path for setting the federal funds rate once the conditions for liftoff have been met,4
in general as the gap between actual and potential output narrows central banks begin to become concerned that the momentum will push an economy through its capacity constraints,4
in order to model cooperation among large financial firms however an additional factor needs to be incorporated,2
a nonaccommodative stance to policy implementation is essential,4
they also include adjustablerate mortgages arms with a payment option allowing consumers to make âCminimum paymentsâ of less than the accrued interest,0
hence they are under constant pressures to spin activities and functions out of subsidiary banks and to operate through bank holding companies and foreign subsidiaries,2
but the final result will be a better break for small savers,0
the bidding of firms to raise money directly from saverinvestors rather than from financial institutions has caused this years rapid runup in market ratesthe shift among financial institutions,2
if fiscal policymakers successfully address the remaining issues and provide a multiyear roadmap toward fiscal health those actions would help reduce the uncertainty that has been holding back the economy,3
as such clearing and settlement systems are critical for the performance of the economy,2
if that happens the export of goods manufactured in the united states should grow steadily  although slowly  over the year,1
cattle and calves were the second largest source of income on the basis of a modest gain in production and a sharp up surge in prices,1
transportation costs from the region to  these markets are high  and have limited the types of goods that can be     exported,1
the  regulatory response usually lags developments in  the marketpl ace and ì s typi cal ly pi ecemeal ,2
rates  and  economic  since then monetary policy  has gradually reduced inflation over a long period of moderate economic growth and established the credibility that helped bring longterm interest rates down to their lowest levels in 20 years,4
in particular the congress and the administration will soon have to address the socalled fiscal cliff a combination of sharply higher taxes and reduced spending that is set to happen at the beginning of the year,3
there is an overwhelming amount of research that demonstrates the importance of educational attainment in helping cities grow and thrive,0
this brings us to the final target of policy implementation that is the ultimate goal of achieving desired levels of income prices and employment,0
it takes more credibility and commitment because it requires policymakers to directly influence and manage the publics beliefs about the future policy path that differs from how policymakers behaved in the past,4
answering our critics when policymakers make a judgment call you can be sure there will be criticism from quarters that see things differently,4
sometimes that means a college or graduate degree is needed but sometimes it doesnt,0
according  to  the money  view  however  banks 7  proportionate share of the total credit market whether it is 100 percent 50 percent or even 10 percent is totally irrelevant,2
the banks performance in this area has generally been favorable and any difficulties they may have encountered appear to be startup problems,2
wage increases for direct workers in a factory are reflected not only in the office salaries of the same company but in retail stores hospitals restaurants garages barber shops and other service establishments through the community,0
the readiness of the federal reserve and the extensive preparations in the banking system do not however guarantee perfection,2
after about five years of rapid growth during the late 1990s many highpaying technology jobs disappeared,0
as a number of fomc members have noted in public forums the federal funds rates current setting of 1 percent which implies a negative real funds rate cannot be sustained in a growing economy and eventually will have to be normalized,4
 john  maynard keynes quipped practical men who believe themselves to be quite  exempt from any intellectual influences are usually the slaves of some defunct  economist i wonder whether keynes would see this as a feature rather than a  bug in light of his enduring influence on the profession more than 70 years  after his death,4
average hourly earnings rose 20 cents in april for privatesector nonsupervisory workers to 2545,0
we also have important responsibilities for the stability of the financial system and for the regulation and supervision of financial institutions including our largest banks,2
the only way we can accomplish this is by consuming less o f our own production and exporting more,1
after all a job training program that works in new york city during a booming economy may not work in a small less vibrant southern city,0
actually our mission is very simple  to help ensure a healthy and growing economy,4
competition in bankingcompetition has been a key factor in all the bank holding company legislation created by congress over the past 20 years,2
but my emphasis today will be not the structure or mechanics of credit markets but rather the information contained in the prices we observe in these markets,2
t o have  rapid export growth the rest of the industrial world m u s t enjoy vigorous economic expansion,1
o f course the persistent federal deficit problem also tends to provide upward pressure more about that later,3
in this way the federal reserves mission of achieving price stability is entirely consistent with its mission of achieving maximum employment3 but there is another deeper sense in which the price stability and maximum employment mandates are intertwined,4
certainly manufacturers were feeling the hit from lost business abroad but spending by domestic businesses and consumers was still increasing briskly,1
crafting a budget strategy that meets the nations longerrun needs will become more difficult the more we delay,3
a number of observers have expressed the concern that if a bank is held to an lcr standard of 100 percent in normal times it may be reluctant to allow its ratio to drop below 100 percent when facing large outflows even if regulators were to permit this temporary deviation for fear that a decline in the ratio could be interpreted as a sign of weakness,2
finally there is a tremendous amount of investment activity in the area of alternative nonfossil fuels,1
this situation has been caused in part by the current  recession and more than that by the structural problems of aerospace and other growth industries which are no longer growing,1
this diverse group represents a range of industries in the southeast many with national or international reach,1
banks that integrate risk measurement into businessline goals believe that it has improved the effective implementation of strategic plans,2
the thrift mess the texas snafu and the ldc debt debacle all teach the same lesson,2
the idea is that pefco will be able to raise7 expensive borrowings in the eurodollar market,1
and monetary policy which reacts to every unpleasant economic shock has always as history has shown resulted in the loss of control over noninflationary money growth,4
for the first time in 3 years georgias jobless rate in august was higher than the nations,0
10the us also has a deficit with japan in the nontrade sectors of the current account mainly direct military expenditures,3
but its successor is not yet established2 in my view the prospects for robust economic growth over the intermediate term are likely to be determined not principally by the trajectory of housing prices but by the speed with which a new financial architecture emerges and the form that it takes,2
banks were consolidating which required federal reser ve banks to work together to prov ide them with more seamless ser v ices    our competition was changing  becoming more aggressive using new technology    and the fed system itself was changing in response  centralizing some functions while leaving others decentralized  but frankly the chicago fed was falling behind  we werent positioned to meet the challenges of a future that was different from our past,4
as  well the feds holdings of longterm assets would continue to provide  significant accommodation,4
we can and should provide more details about the interplay between economic conditions and policy,4
monetary policy should be contingent on the economic environment and not on the calendar,4
it tracks wage gains of continuously employed individuals which means it is not influenced by newer lowerwage entrants,0
to be sure banks do have access to insured deposits at low rates,2
one reason that the fed organizes conferences such as this one is to facilitate communication,4
in addition the united stales as the only country in the world which has freely bought and sold gold to other governments will suspend gold sales to any government which buys or sells gold to the private market,3
agriculture is one of  our more efficient industries and given improved trading  conditions both here and abroad farm exports should rise markedly,1
in 1974 banks actually paid out in dividends more than their gplaadjusted earnings,2
3t  a second major issue relating to interstate banking and financial restructuring is the potential impact of expanded geographic competition on the bank failure rate,2
bad decisions are made and resources are misallocated,0
indeed many central banks in advanced economies have tightened policy since the financial crisis prompted by improving domestic activity,4
it can be counteracted by other means to be sure including stronger capitalization,2
at that first meeting in 1997 i talked about the devastating and farreaching effects of foreclosures,2
if as this recent survey suggests subtle yet signficant vestiges o f discrimination persist in our industry then it is the responsibility o f organizations such as the national     association o f urban bankers to identify in specific terms the dimensions o f this problem to suggest remedies and to petition decision makers in banking for redress o f legitim ate grievances,2
over the past decade the size of a typical new home increased nearly 20 percent and many homeowners invested in home improvements and renovations,0
this seems to be passing through to our manufacturing sector which had been so adversely affected by the dollars earlier appreciation,1
as this historical capsule suggests our hybrid publicprivate nature and our decentralized structure have combined to promote competition without sacrificing coordination,4
thus while these data are useful for capital flow analysis they do not necessarily reflect the office of the bank responsible for the lending decision nor the country of the bank which bears the ultimate exposure to risk on a loan,2
saturday march 16 at 900 am a second meeting is held at the cleveland reserve bank vith the ohio financial institutions,4
in addition the number of mortgages that defaulted in the first year after originationcommonly considered a gauge of poor underwritingrose appreciably as the bubble approached its peak4           the originate to distribute model of loan origination may have contributed to this decline in underwriting standards,2
these have been trending up in real or inflationadjusted terms since late  1986 the dollars substantial drop in value against foreign currencies makes our goods more attractive to foreigners,1
it is too early to tell just how successfully the business community is carrying out its investment plans in 1969 however as the year got underway it was expected that the increase in fixed investment would be particularly sharp during the first quarter perhaps as much as 13 per cent at an annual rate with the pace declining steadily thereafter to perhaps 4 per cent at an annual rate in the final quarter,1
then they turn around and demand or support the demands of others that students be admitted to college who cannot meet the academic requirements or they seek to dictate the course of study  tailoring it to fit the capabilities of those who are unable or unwilling to measure up to the established requirements,0
in addition a single europe moved closer to reality with the new ec maastricht treaty and the possibility exists of a single european currency and a central bank in 1997  to be able to turn to the pursuits of peace and prosperity signifies a giant leap for humankind please notice that i did not say mankind,4
i am sure that you are aware by now of the interagency efforts to develop and issue new enhanced bank secrecy act examination guidelines and procedures within the next few months,2
i hope to continue to benefit from it during many years to comeas mortgage bankers you deal with one of the elementary human needs  shelter,2
however these gaps have not narrowed as the labor market has strengthened,0
community developers have made important strides in establishing performance parameters and developing information systems to promote rigorous evaluation of programs and organizations,0
for example a firm with little reliance on shortterm funding is less susceptible to runs and thus to the need for engaging in fire sales that can depress capital levels,1
6 as a first approximation therefore it seems reasonable to assume that the initial impact of monetary policy changes are felt by the member commercial banks first in the amount of their r e s e r v e s and then on their loans investments and deposits,2
but the recent cyclical downturn created a huge new glut of unemployed workers with the result that it will likely take a lot longer than normal for people to find the jobs they want,0
i see these changes as a signal that our countrys current labor market performance is much closer to maximum employment than the postworld war ii us data alone would suggest,0
movement in the monetary base parallel this acquisition of federal reserve debt,4
of course this liquidity is not free nor should it be,2
after that simple service work like processing creditcard receipts and mindnumbing digital toil like writing software code began fleeing highcost countries,0
and for tbtf banks  the forces of market discipline from shareholders and unsecured creditors are  limited,2
some of the artificial barriers imposed in the bank holding company act and the glasssteagall act for example could be lifted to increase the competitive viability of banking organizations without adding parallel additional risks to the stability of the banking system,2
when it comes to monetary policy those of us directly responsible for policy decisions sit around the table and offer our observations and judgments,4
it is generally believed that if an economy is open to foreign trade            and capital           flows and has flexible exchange rates monetary policy becomes more           effective in fighting cycles whereas fiscal policy becomes less effective,4
longer run allocations can be handled far more efficiently by other types of governmental action,3
bemoaning layoffs recently announced by a major bank a newspaper story placed the blame on mergers consolidation and a steady migration of some operations  to lowercost regions however research indicates that the overall impact of mergers and acquisitions on the total number of banking jobs is small and even casual observation reveals that change has altered the nature of such jobs for the better,2
but the defects of a goldoriented system are obvious and are clearly recognized in most countries,4
the bureau of labor statistics reports each month on the number of americans who are working part time would like to work more hours but are unable to obtain those additional hours,0
in many participants views this policy asymmetry made it prudent to wait for additional confirmation that the recovery was on track before reducing accommodation further,4
one recurring theme is that banking crises usually can be traced to large credit losses triggered by instability in the macro economy,2
1  for example the annual rate of growth in average hourly earnings for production workers in the us construction industry increased from about 3 in 1963 to about 5 in 1966 to nearly 9 in 1969,0
these higher prices are apt to become embedded into the wage and cost structure of the economy and contribute to an inflationary environment,0
the analysis of hofmann shim and shin 2016 suggests that emes may be hurt more if their banks or nonfinancial corporations have relatively large dollar liabilities as the larger dollar appreciation associated with the policy rate tool would precipitate greater eme balance sheet deterioration in this case,2
we are sensitive to the opinions of economists  some who say we have gone too far and will cause a serious recession and others who say we have not gone far enough to prevent further inflation,4
an examination of these objections does not i believe undermine the case for the type of sifi capital standard i have described,2
the tools that fall into that category are the assetbacked commercial paper money market mutual fund liquidity facility or amlf the commercial paper funding facility or cpff the money market investor funding facility or miff and the term assetbacked securities loan facility or talf,2
the brave new world  massive financial innovation and ample liquidityno single statistic can put the recent surge of financial product and market innovation into perspective,2
in all of this it is our hope to increase the knowledge and awareness of mney managers in the banks other financial institutions and financial markets at large as to the directions and goals for mnetary policy,2
but prices of goods subject to                            foreign competition have fallen over the same period                            by 88 percent for computers and peripherals 70 percent                            for video equipment 39 percent for toys 13 percent                            for womens outerwear 16 percent for mens                            shirts and sweaters,1
together with lower countryspecific macro risks arising from the adoption of the common currency this reduction in transaction costs has greatly improved the breadth and efficiency of european financial markets,2
in the legislative arena perceptions of the public interest may differ among industries and those differences must be reconciled,0
specifically reform efforts are concentrated on developing standards that are more risk sensitive and that build upon the internal riskrating and riskmeasurement systems that have been developed by the relatively small group of the worlds most financially sophisticated and complex banks,2
lower rates also support the prices of housing and financial assets such as stocks and bonds,2
advocates of the fiscal policy view believe that a change of a dollar in government spending or taxing may lead to more than a dollar change in total spending because of the impact of government spending on disposable incomes of consumers and business,3
a dollar of new saving flows through financial markets to firms that allocate it among different types of capital investment,2
competitors from abroad will have natural cost advantages due to their plentiful labor supply,0
the second consequence of rapid economic and technological change that needs to be addressed is growing worker insecurity the result i suspect of fear of potential job skill obsolescence,0
one of my big  surprises since taking this job is that there is a lot more skepticism among  policymakers about the relevance of incentive effects than i would have  thought,4
in addition  foreign banks also have 125 representative offices in the us which do not engage directly in banking operations,2
for several other countries including the united kingdom canada australia and new zealand the international investment positions have for extended periods diverged from the value suggested by historical current account balances in a manner similar to that of the united states,3
in that respect  it sure you can sympathize with federal reserve policymakers who have the m task today of reconciling conflicting theories conflicting policy goals and conflicting data in providing the monetary contribution to a strong yet noninflationary recovery,4
so i ask you  tonight to do two things first carefully consider the risk of politicizing  the fed and so guide your elected representatives,4
rather it is to be answered in a context in which banking has become a business of restricted entry and one possessing a monopoly of an indispensable resource,2
the oldest  of these banks is the bank of england which goes back more than 250 years,4
small businesses are very susceptible to swings in the economy and have a much higher failure rate than larger operations,1
having one school one supervisory structure and a combimd privatepublic examining force would seem to be an obvious way to reduce the cost of bank examinations and enhance its effectiveness,2
unfortunately i cannot report to you that this is perceived at all clearly either in all academic or all policymaking circles,3
were also hearing increasingly about  businesses finding innovative ways to give workers more nonwage compensation  everything  from flexible work hours to culture improvement efforts to one contact who has  started beer cart fridays,0
i expect this development to continue given the modest undershooting of the natural rate of unemployment in my economic outlook,0
manufacturing was one of the first segments of the economy to feel the effects of the slowdown as the imbalances that developed toward the end of the last expansion reduced the demand for capital equipment and inventories,1
for one we are measuring premiums in various markets that          have different risk exposures,2
although business activity has been slow to pick up pace i must point out that  this recession was certainly milder than earlier ones the unemployment rate rose to 108 percent in the last two months of 1982 and it remained high by historical standards during the expansion of the mid1980s,0
the fourth use of financial stability in doddfrank is as a factor to be taken into account in various regulatory determinations,2
you do not know how much things will cost whether you will be able to buy a house how to2to make on the occasion when washington college is bestowing on me the honor of a degree to the importance of taking a longrun view,0
in a typical recession there is a downward spiral in which layoffs lead to still lower demand and subsequent additional layoffs,0
i see job creation eventually falling to about 100000 a month by the end of 2019 just as i think we need to put monthly fluctuations in inflation data in perspective i think we need to put job growth in context,0
but youll recall that after several moratoriums the  issue of war debts became lost in the shuffle as the former combatants took up new positions that eventually led toward the second world war,3
all of these federal programspresent and proposedonly tend to get the federal government more deeply enmeshed in the operations of the housing market,3
again a more rapid buildup of surplus agricultural stocks appears statistically as growth whereas an improvement in the quality of our school teachers does not,1
are asian countries losing faith in free markets,2
17given the 1975 consumption level it remained to determine what the dollar cost to the consumer would be if he had to shift his purchases from the cheaper foreign to the more expensive domestic product as a result of the imposition of a quota,1
indeed to support their independence and to guard against their engaging in fiscal policy central banks are correctly permitted to take on only a small amount of credit risk,3
federal reserve board invites comment on three proposed rules intended to help ensure banks maintain strong capital positions press release june 7 return to text   2 for more information see the boards public website,2
in the united states no less than in our trading partners substantial lobbies still work against the elimination of subsidies that benefit their industries,3
with increased informationprocessing capacity loan portfolio managers can better assess risk and monitor credit performance,2
4 congress also freed the fed from depending on appropriations to meet its expenses,4
the true and basic function of reserve requirementsis not to provide liquidity but to permit the federal reserve tocontrol the supply of money and credit so that monetary policy caneffectively promote our national economic objectivesto achieve good management over the supply of money andcredit reserve requirements must be met by holding assets whoseaggregate volume is under the control of the federal reservewhatever their role may be in protecting bank liquidity the reserverequirements set by the various states do not meet this test,2
the federal reserve has devoted considerable energy in its postcrisis regulatory work to incorporate the tailoring concept in its regulation and supervision across the spectrum of small medium and large firms,1
and were going to have to come to grips with more than just deficit reduction,3
however the most noted feature of the current recovery is that employment   has been below paranother socalled jobless recovery,0
this is especially true from the point of view of the black cormnunity for whom the fap would represent an early and significant step on the road toward an improved standard of living for a sizable number of families still suffering from the economic deprivations of a long history of discrimination and its corrosive consequences,0
if the fed were open to interference by elected officials that pressure could result in shorttermism and encourage hasty decisions to please political ends rather than economic ones,3
the head of that commission studied european central banks before proposing a new central bank for the us even with other central banks as a model several years of debate ensued before congress passed the federal reserve act at the end of 1913 the debate at that time naturally occurred in the context of the history of central banking in the us and the debate was just as heated in 1913 as it had been in 1791 and 1816 the federal reserve began operating in 1914 and it was built on competing goals that had to be balanced,4
by doing so you avoid suspicions regarding the competence and judgment of independent auditors,2
we are looking to the basel committee on banking supervision to update its guidance on liquidity management in light of the recent experience,2
but as long as consumers keep the faith the recession should be mild and shortlived,0
through these purchases we have driven  down mortgage rates and helped rekindle the us housing market,0
a second test of capital inadequacy would be an overall insufficiency of our capital stock to employ fully and efficiently our rising labor force after allowance is made for its changing composition,0
indeed open markets and expanded trade are one of the best ways to increase economic growth particularly in developing countries,2
with regard to credit cards several proposals that would establish nationwide ceilings on credit card interest rates have been introduced out of concern on the part of some members of congress at the failure of credit card interest rates to decline along with market rates,2
foreclosed properties that sit vacant for months or years often deteriorate from neglect adversely affecting not only the value of the individual property but the values of nearby homes as well,0
a frequently expressed concern is that an inflationtargeting regime is unresponsive to fluctuations in the real economy,4
in its new framework the fomc made key changes with regard to both parts of its dual mandatemaximum employment and price stability,4
in pursuing our employment mandate in the shorter term the fomc has a crucial role to play in setting the conditions for maximum employment in the longer term,0
the expansion of federal reserve lending is helping financial firms cope with reduced access to their usual sources of funding and thus is supporting their lending to nonfinancial firms and households,2
were familiar with many of the causes of the upsurge such as poor growing weather and high distribution costs and by now most of us are experts in the intricacies of the cattle cycle,1
in discussing the road back to financial stability and economic prosperity i want to leave you with the idea that yes this is indeed a time of challenge for community bankers as it is for all americans but it also is a time of opportunity,0
some dissatisfaction with the 8hour day too seems to be indicated by the heavy movement of women into the labor force some of which may reflect dissatisfaction with the earnings that husbands bring home  from their 8hour stint,0
in that respect such policies should be more effective and perhaps less controversial in slowing the buildup of excess credit than a measure directed squarely at one sector which might be quickly met by the redirection of a reach for yield to other asset classes,2
outyear megadeficits tend to create doubts as to the propects for the success of economic pol i cyto some the very capacity of economic policyto contain inflationary pressures over the long run,3
during this period the median size of houses also increasedfrom 46 rooms in 1950 to 53 rooms in 20009 as the quantity and quality of the residential housing stock increased homeownership also became more widespread,0
in addition to the measures america might take to bring balance to trade flows other advanced industrial economies need to rely less on exports and more on domestic demand,1
inflation as is generally recognized throughout the world destroys jobs and undermines productivity gains the foundation for increases in real wages,0
as i am sure oscar would agree there is always room for improvement in the stress testing ring,2
indeed to the extent that the operational demands of the foundation and advanced irb approaches are viewed as comparableparticularly in light of input from consulting and thirdparty vendorsmany institutions may desire to migrate directly to the advanced approach so as to achieve the largest possible reductions in regulatory capital,2
the first option which i favor is setting an explicit numerical target for inflation within the context of our current dual mandate,4
it is obviously useful for banks themselves to know they can weather a storm but it is equally useful for the public to know that the banks are well capitalized,2
at that point our laws become the resting place for unfair practices and broad disrespect for the law generally,3
the protesters showed up everywhere and demonstrated against the economic principles of frédéric bastiatand by implication adam smiththe economic principles that finally after many millennia broke the cycle of poverty that had haunted mankind from the beginning to the industrial revolution,3
similarly people have thought that when the unemployment rate declines much below 6 percent inflation pressures begin to rise and become visible,0
eliminate the link between the futures and cash  because portfolio insurance and index arbitrageboth forms of  program tradingare the strongest links between the two markets some people have argued that these activities should be restricted,2
misfortune will occur sometimes and business conditions will periodically weaken as those events have occurred routinely in the past,1
this is the costly path reached by stressing the everbalanced budget concept,3
return to text   5 doddfrank also uses the 50 billion threshold in other parts of the law such as to define the universe of firms that must pay the federal reserve for the cost of examination and supervision and that are subject to ex post assessments in the event that taxpayers were to bear any loss as a result of the resolution of a firm under title ii of the law,2
the intrinsic value of inclusive growth  pennsylvania economic association annual conference alvernia university reading pa june 2 2017 patrick t harker president and chief executive officer federal reserve bank of philadelphia  good afternoon and welcome its a pleasure to be here,0
the fed made clear to depository institutions that cash was available and maintained operations to ensure that all demands could be met,2
on the other hand after consolidation some firms shift toward riskier asset portfolios and consolidation may increase operating risks and managerial complexities for those firms,1
in part this argument turnd on a semantic trick switching the definition of monetary policy from control of interest rates to control of money supply,4
hy argued that advanced capitalist economies have found ways to mitigate the risks of financial and banking crises or at least attenuate their adverse effects,2
many central banks that have guidelines refer to the time frame with the qualitative phrase over the medium term it is difficult to say precisely what this meansis it three years or five or ten,4
i believe a banking system built on a foundation of safety and soundness will go a long way toward creating the kind of broad and strong financial markets to which china aspires,2
the one obvious negative in the outlook stems from cutbacks in defense spending that are affecting the defense and aerospace industries as witnessed by the recent proposed merger o f lockheed and martin marietta,3
a second fruitful approach to  additional tailoring concerns supervision,2
at the fed we too are nonpartisan and focused squarely on the public interest,0
the fed has been understandably more reluctant to restrict growth in money and credit for fear of the severe effects on areas of high social priority,0
i also want  to thank the many bankers who did such excellent work with the various committees and divisions,2
a week ago one of my colleagues governor robertson testified before that subcommittee on two proposals to bring into one agency all federal bank supervisory functions,2
flnanclal markets  i  do not  thlnk that  the deslred  government lnvolvement ln  shourd be ended,2
sometimes people are scared off by the prospect of hearing an economist,0
these competencies are also some of the fundamental abilities our schools seek to inculcate in our children,0
nonetheless these two sectors by virtue of their size will again be the major sources of new jobs,0
overall euroarea gdp increased at an annual rate of 134 percent last year sufficiently in excess of potential output growth to bring the unemployment rate down nearly 1 percentage point,0
in march the bank of england announced that it would purchase government securities commercial paper and corporate bonds and the swiss national bank announced that it would purchase corporate bonds and foreign currency,4
in addition indicators of market stress and illiquiditysuch as spreads in shortterm funding marketshave generally returned to levels near those seen before the crisis,2
along these lines daylight credit can arise not only as a result of fedwire activity but due to timing differences involving nonwire payments such as checks and ach as well,2
one key implication of an increase in the structural demand for reserves is that reserve scarcity will likely be associated with a balance sheet that is relatively large,2
accordingly the potential risks to the banking system from highly leveraged credits have received our close attention for some time,2
it is important to recognize that just as basel i became obsolete basel ii will not be the final word on risk management regulation,2
all 12  presidents of the various regional federal reserve banksincluding meand the  seven governors of the federal reserve board contribute to these deliberations,4
moreover if the focus is only on conventional mortgages the number of loans to black households actually fell 15 from 1995  as a result there is concern in some quarters that lenders might be retreating from their commitment to minority lending,0
among the institutions that are most crucial to economic growth are those that enable a country to allocate capital to its most productive uses,2
i have to admit that ever since i took my oath as a central banker i find myself using phrases like guardedly optimistic i suppose thats why were called the federal reserve,4
the board will be considering these provisions soon with an eye to meeting the statutory deadline for rules of may 2001  merchant banking under glb any fhc with a securities affiliate may engage in merchant  bankingthe ownership for the purpose of ultimate resale of securities of a company,2
the ailment was a combination of incapable management and a slow but sure accumulation of weak loans a combination which acts like creeping paralysis,2
were aware of whats happening in agriculture the fact that if we were to have the same level of agricultural production or would have had in 1962 that we had had in 1940 there would have been half again as many people employed in agriculture,1
return to text 10 financial stability board fsb launches evaluation of toobigtofail reforms and invites feedback from stakeholders news release may 23 2019,2
is there still significant slack in the labor market,0
what can be concluded i think is that we are far enough through the current interlude of credit restraint to draw some instructive lessons from its course,2
by lowering privatesector expectations of the future path of shortterm rates this guidance can reduce longerterm interest rates and also raise asset prices in turn stimulating aggregate demand,2
a wellfunctioning legal system allows small claimants both creditors and shareholders to have their rights enforced,3
each statement could provide the rationale for the policy decision in terms of how accumulated changes in this consistent set of economic and financial conditions have or have not influenced the committees assessment of the factors relevant for policy ie the arguments in our reaction function,4
by making collateral less valuable they also increase the risk of lending to businesses and thereby worsen the lending terms faced by borrowers,2
but the main reason for removing the taxable payroll cap is that both programs together are woefully underfunded and this would be a small step in the direction of fiscal responsibility,3
why might underlying inflation expectations have moved down since the financial crisis,2
business considerations however typically impel a bank holding company management to do whatever it responsibly can to honor the obligations of its affiliatesoccasionally among the interested groups dealing with a bank affiliate  its creditors its customers and its parents shareholders directors depositors and regulators  representatives of one12 threat of any major consequence to the banking system as a whole even though the viability of an individual organization might be prejudiced,2
instead financial instability should be seen as a consequence of the moral hazard effect of official intervention,2
this is my interpretation of well underway but as chair yellen indicated in her december press briefing the fomc has not given further guidance on this4 the final phrase in the monetary policymakers lexicon id like to discuss is the fomcs symmetric inflation goal  symmetric inflation goal the fomcs statement on longerrun goals and monetary policy strategy serves to clarify the fomcs framework for making monetary policy decisions5 i view the statement as a very important part of the committees communications arsenal,4
capacity to produce however can only be expanded as the labor force grows capital is invested and as technology expands,0
government will likely be a positive factor on balance although the scale of its contribution remains to be determined,3
on the other hand some of the attempts of congress to open us up i think are counterproductive,3
how large will the feds balance sheet become by the time these asset purchases end,4
the reduced return to capital discourages investment,1
the reliance on credit to meet unexpected expenses is pronounced among those already carrying a balance on their credit cards,0
job growth tailed off in 2007 as the residential construction industry began shedding workers,0
the el paso labor market has outperformed that of the us for  several years,0
it seems likely that the synergies of advances in laser fiber optic satellite and computer technologies with themselves and with older technologies have enlarged the pool of opportunities to achieve a rate of return above the cost of capital,1
also to attract users b2b payment mechanisms may need to provide additional featuresfor example tools that reduce credit and timing risks in domestic and international markets,2
government initiatives can also play key supporting roles,3
when the funds rate objective changes issue a press release saying so  with a sentence or two explaining why,4
unless the resulting incentive to overinvest in risky projects is offset by an effective program of supervision riskfree agents are likely to misallocate resources,2
1  relationship between short and longterm interest rates to understand the shape of the yield curve and how it changes over time we need to consider how longterm interest rates are related to shortterm rates in efficient financial markets,2
or will market discipline pillar 3 be enough to ensure that banks economic capital decisions are appropriately disciplined,2
the economy in mississippi is slowing from a spurt of growth that is attributable to gamblingrelated industries although overall levels of income and employment remain high,0
in a concentrated financial network with a few key players and when liquidity shocks are targeted at the most connected institutions distress at highly connected banks spreads widely through the rest of the system,2
the apparent strengthening of the us economy suggests that in the nottoodistant future monetary policy will have to begin reversing course from a very accommodative policy stance,4
an introductory chapter on the history and purposes of bank regulation revealed a complicated set of issues concerning changes in the structure and activities of banks which among other things suggested that the rationales for regulating banks might vary depending on the size business model and affiliations of a bank,2
people who become discouraged over their prospects for finding jobs often stop looking for work,0
the fomc has made no such commitment and the statement indicates as much  if economic conditions change then so will policy,4
while none of  us are satisfied with the current pace of economic expansion and job creation  presently it is not clear that conditions warrant further crisislike  deployment of the feds arsenal,0
derivative products offer users the ability to shift and manage risk in an efficient manner,2
digitized for fraser httpsfraserstlouisfedorg federal reserve bank of st louisdepartment of the treasury  washington dc 20220 telephone 5662041 for release upon delivery expected at 930 am june 9 1980 remarks by the honorable g william miller secretary of the treasury at the issuance of agency consumer programs at the presidents direction my colleagues in the cabinet as well as the heads of the independent agencies have begun a process that builds the confidence of the american people in their government,0
but central banks around the world are finding that the beneficial effects of their monetary policies on financial conditions are being offset to some extent as movements in financial markets are increasingly driven by headlines regarding actual contemplated or even rumored action by european officials,2
is monetary policy working,4
rather than imposing a predetermined set of statistics and reporting schedules for all lcbos we may require some reverse engineering tailored for each bank,2
see gary gorton 1988 banking panics and business cycles oxford economic papers vol,2
not surprisingly it is now exporters in other countries who have voiced concern,1
for example from 1940 to 1950 the number of farms in this district decreased about 11 per cent but average size increased about 20 per cent ranging from an incre3se or 12 per cent in minnesota to 52 per cent in montana,1
you have probably noted by now that i have not been using the phrase dual banking system,2
as the economy strengthens this year i expect that businesses will continue to add to their payrolls and that we will see modest declines in the unemployment rate reaching 8½ percent by the end of this year and in the 7 to 8 percent range by the end of 2012 residential and commercial real estate sectors remain weak but i do not believe that weakness in these sectors will prevent a broader economic recovery,1
we have already begun experiencing keen competition  from outside our borders in financial and insurance services for example,2
while the other issues i want to touch on this morning are structural the basic question remains are american banks competitive domestically and internationally with other financial institutions offering similar services,2
let me add a point about the differences between minimum regulatory capital as set out in basel i basel ii or any supervisory model and the level of capital that banks may choose to hold for business reasons,2
in areas of the country where lowskill lowwage jobs are common as in the south so too is sentiment toward protectionism,0
third how are auto parts companies restructuring their organizational and production processes to put themselves on firmer footing going forward,1
our creditors may becom e less willing to lend and     just as any borrower eventually learns debt service inevitably rises along with the debt and becomes a burden,2
when we reach that amount we should stop the asset purchases and then reassess the state of the economy to determine if further action would be beneficial,4
but we have already delayed too long in facing up to a fundamental imbalance reflected in those related budgetary and trade deficits that left untended poses a great threat for the future,3
the level of nonfarm noncorporate productivity implied by this exercise has been falling continuously since 1973 despite reasonable earnings margins for proprietorships and partnerships,1
the stress tests include a scenario design process in which the macroeconomic stresses in the scenario become more severe during buoyant economic expansions and incorporate the possibility of highlighting salient risk scenarios both of which may contribute to increasing resilience during periods in which risks are rising13 similarly minimum margin requirements for securities financing transactions could potentially vary on a countercyclical basis so that they are higher in normal times than in times of stress,2
these methods are also being studied at the federal reserve board,4
the federal reserve systems role in providing good money is to staff and equip its own offices with facilities equal  11to any technological challenge it may confront,4
it is here that in my view the approach has a good deal of validity because it reveals that inflation has affected the profits of banks in a way that is not shown up by conventional accounting,2
the fomcs strategy was to continue to gradually reduce the extraordinary accommodation that had been put in place to address the great recession,4
i am particularly pleased to have this opportunity for a discussion with a group of bankers because each of you large and sma 11 is being deeply and swiftly affected by changes in the provision of banking services changes that are here today and wi 11 certainly not be gone tomorrow,2
indeed some monetary policy mistakes in the past have arisen precisely because too many people believed the myth,4
i remember the tension and our holding our collective breath as we were unable to find a buyer for one of the banks that had to be closed knowing that bank would not open its doors for business on monday morning,2
the automobile industrys planned output curtailments in february along with severe snowstorms and a wildcat strike at the general motors fisher body plant seem to have stopped the recent expansion of inventories of new cars at about 15 million units,1
through project hometown the chicago fed will continue to bring together leaders and experts with diverse perspectives to examine how our communities can recover from the pandemic overcome longstanding inequities and grow stronger,0
emergingmarket central banks that adopt inflation targeting must not only develop the forecasting and monetarypolicy tools needed to meet their targets they must also choose target ranges that are not so narrow as to be unachievable but narrow enough to allow monetary policymakers to build credibility fraga goldfajn and minella 2003,4
it remains in the most recent statement of our longerrun goals see federal open market committee 2015b,4
as such they do not hold the credit card receivables generated in their respective areas but transmit the paper to their correspondent banks,2
capital adequacy is also of central importance in merger and acquisition cases,2
because the job of a central banker is to protect the purchasing power of currency it is overall inflation that we need to keep down not just core inflation,4
while the pressures for change seem to be increasing most of us would probably agree that the next congress is not likely to authorize unlimited interstate banking,2
the critics don2t seem to mention perhaps the biggest risk of the increasing importance of models the lulling of the users into a false sense of wellbeing that loses sight of these potential tail events,2
using this type of capital arbitrage banks can game the system in such a way that the resultant basel i ratio does not have substantial meaning for the public bank management or the supervisor,2
the federal reserves interest in small business the federal reserve board has long recognized the importance of small businesses and their dependence on commercial banks for financing,2
banks have nearly 1  trillion of excess reserves,2
moreover the attack caused serious disruption to the operations of several financial firms that play a prominent role in clearing payments,2
even so this program could take some time to get up and running and the reunderwriting required for h4h loans would likely take more time and incur greater operational costs than other plans,0
meanwhile the saver permits 100 pounds of his resources to be used for investment in such items as durable goods or plant and equipment,1
the inflation that results from the flood of money into the  economy turns out to be far worse than the fiscal pain those countries hoped to  avoid,3
the september jobs report showed an unemployment rate of 42 percentessentially where it has been since april,0
the main problem here is not the reduction in capital charges against the high quality loans although this does raise tension with prevailing international capital standards,2
when the 12 regional bank presidents and the seven fed governors sit down to determine monetary policy as the federal open market committee the great technological advances of our age significantly impact what we do,4
for thirty years most of our countrys banks even the largest were innnune from the legal disclosure requirements of the federal securities laws,2
hence there is a strong potential for any one borrowers distressand the associated downward pressure on pricesto cause a tightening of collateral or regulatory constraints on other borrowers,2
moreover industrial     production and nonfarm employment have risen significantly throughout the past three months and the jobless rate has stabilized after a surge during the recession period,0
in turn these labor costs have contributed to heightened competition from cheaper imported parts,1
in most cases blanket assurances are neither feasible nor realistic,2
in many cases they were the only rational courses of action that could be taken by congress the federal reserve the federal deposit insurance corporation the office of the comptroller of the currency or individual states,4
again as noted above the sharp rise in the number of jobs affected has aroused labor unions and others to become increasingly critical of national policies promoting freer trade and less mindful of the advantage of such a system to the domestic economy,0
but we do believe that your understanding of monetary policy would be improved if you recognized that shortterm variations in the pace of money growth are at some times unavoidable and at other times actually desirablelet me return now to a point that i made earlier namely that consistent restraint on the growth of money and credit will until inflation slows substantially put a damper on how much the economy can reasonably be expected to grow in the second half of the year and on into 1982the federal reserve announced its targets for monetary growth in 1981 in its report to congress a few weeks ago,4
the error of that judgment led to the glasssteagall act and the separation from commercial banking of the brokerage and underwriting of securities,2
they generally agree 1 that saving is important 2 that an unencumbered market would allow savings to seek its optimal rate 3 that the current us saving rate is below its optimal rate 4 that fiscal policies can influence saving and 5 that at least part of the reason for the low us saving rate is a whole host of governmentpolicyinduced distortions that overall have an adverse impact on saving,2
and second how can we make ourselves more representative of the people we serve,0
third revised regulations should be tailored recognizing that banks vary widely in size and business strategy and serve communities with widely varying needs,0
of course a good mandate dashboard should also include some measure of the future course of inflationary pressures,4
we all lament the shortages of ustrained engineers for the demand already evident in our economy,0
worldwide creditors are tightening their standards and  consumers and businesses are correcting their courses,2
as shown by the survey of economic projections almost all my colleagues believe as do i that it will be appropriate to maintain the policy rate near zero if the economy evolves as expected,4
however some statutory requirements by their terms apply to all banks,2
banks did not  chafe at their geographic limitations or they did not mount pressures to remove such limitations in large part because their local and state markets tended to provide good profits within the sheltered regulatory environment,2
under that act the establishment of branches of federallychartered  savings and loan associations would be limited to the branching authority under state law for statechartered sayings and loan associations mutual savings banks or commercial banks,2
monetary policy has attempted to curb excessive credit ex pansion through openmarket operations through marginal reserve requirements on cds and other instruments and now through the highest discount rate in the last halfcentury,2
being explicit will enhance the credibility of our commitment to price stability which will help anchor inflation expectations and foster price stability and moderate longterm interest rates,4
as people get laid off from jobs with big companies they often start their own new businesses helping to keep the economy resilient,0
businesses  as  does  mortgage  interest  for  inflation contributes to a bias toward debt  finance and high leverage has left many us firms and households  excessively  vulnerable  to  bankruptcy,2
thus in early october it was clear to the members of the federal open market committee that both the domestic and international objectives of the united states were firmly interconnecte and that both required firm action in reducing the sources of inflation in our economy,4
some have attributed such behavior to the effects of an inappropriately low capital charge in the basel accord for shortterm interbank credit extensions,2
indeed the high road demands that we become effective institutional innovators for positive changes in our communities and for housing practices that promote community wellbeing,0
moreover lenders who had to make unpopular turndowns of loan requests naturally would find the program a convenient crutch,2
as one who shares in the development and execution of these policies i have no doubts about my own responsibilities,4
these reserve banks distribute currency act as a bankers bank and generally perform the functions of a central bank which includes serving as the bank for the us treasury,4
yet problems arise because the various sectors of the economy dont all depend equally on bank creditand bank borrowers dont all have equal power or credit standing,2
these improvements seem to have been the result both of organizational changes in business operations and of innovations in the use of existing technologies perhaps the result of firms applying more effectively the new technologies they had acquired at a rapid pace in the late 1990s,1
the most important single change was that the fed began to disclose its decisions on the target fed funds rate in 1994 besides disclosure of policy actions two other features of the conduct of policy promoted transparency,4
in a crisis of course monetary authorities are often overwhelmed and lose any control of the foreign exchange value of their domestic currency,4
lockhart says that the recent drop in the national unemployment rate to 77 percent is encouraging,0
this integration has helped moderate the boom and bust cycles in mortgage creditan additional objective of the governmentsponsored housing finance agencies has been to demonstrate die feasibility of new methods and instruments for supplying housing credit,3
nevertheless the lesseducated have clearly reaped many of the benefits of economic growth in the 1990s,0
a tally of legislative changes affecting the savings bank industry during the past year alone filled four pages of a recent issue of the savings bank journal,2
still all of us have much to learn and much of what we know today will almost surely change in the future,4
during 1965 however with the relatively rapid expansion in money stock and the more expansive federal budget especially in the last half of the year demand grew more rapidly,3
of course we obviously would act aggressively if actually faced with an imminent downturn,4
schroeder pete and trevor hunnicutt 2019 fed chief calls for facebook to halt libra project until concerns addressed reuters july 10 available online,3
these initiatives include  endeavors to promulgate standards of bank supervision on a global basis initiatives to markedly increase transparency of central bank accounts more prompt and detailed data on global lending compliance with codes for fiscal transparency plus moves toward ensuring sound corporate governance and accounting standards,2
but as virus cases surged toward the end of 2020 many state and local governments reimposed restrictions on business activity and others postponed plans to lift their existing restrictions,3
in addition i believe it has been appropriate for the fed to maintain the setting of the federal funds rate at 0 to 025 percent and to purchase treasury securities and agency mortgagebacked securities to support the smooth functioning of these markets and to provide some additional level of accommodation during the pandemic,2
because the difference between a nations domestic saving and domestic investment is the nearalgebraic equivalent of that nations current account balance external imbalances were small1  however starting in the 1990s home bias began to decline discernibly the consequence of a dismantling of restrictions on capital flows and the advance of information and communication technologies that has effectively shrunk the time and distance that separate markets around the world,2
at this stage of the recovery there are signs of reduced nonbank financial sector vulnerabilities,2
one urgent question is can us financial institutions forced into a holding company structure with all of the attendant inefficiencies of funding and management compete effectively with european and japanese banks which will probably develop as socalled universal banks,2
no manufacturing firm would ever finance a portfolio of fixed assets with commercial paper once market sentiment became distrustful of subprime assets these assets lost value and became no more marketable than investments in factory buildings,2
looking ahead the global trends of deregulation denationalization privatization and tax reformtax reduction suggest that the 21st century will be the century of markets,2
loss of skills and lower rates of employment reduce the economys overall productive capacity over the longer term,0
the development of the federal safety netdeposit insurance the discount window and access to fedwire and daylight overdraftshas inevitably impeded the workings of market discipline in the regulatory arena,2
extend unemployment insurance,0
whereas growth in jobs in the private service sector has been quite strong manufacturing industries which tend to canpete more internationally have decreased their work forces,0
let us suppose that the evidence is so compelling that policymakers become fairly confident that valuations are excessively rich,2
the shortfalls in the medicare program however will almost surely be much larger and much more difficult to eliminate,3
w e might refine our present tools  or develop n e w ones for reducing u n e m p l o y m e n t in the inner cities especially a m o n g black teenagers,0
monetary policy has been effective in keeping aggregate demand growing albeit at a sluggish pace,1
credit supply and house prices evidence from mortgage market segmentation nber working paper series 17832 cambridge mass,2
stronger consumer activity,0
the needed alterations to the structure and operations of large financial firms will be unpopular since they are likely to involve reductions in reliance on shortterm funding and the adoption of more easily severable subsidiary structures,2
by the late 1950ts the other industrialized countries had rebuilt their manufacturing plants and improved their management techniques so greatly that they were not only in a position to supply more of their rapidly growing domestic demands but to compete vigorously for the export markets of the worldthat year of 1958 marked a turning point in the economic affairs of our country,1
shifts in the mix of nonreal estate debt are more dramatic with the banks dropping from 78 percent to 66 percent while pcas grew from 12 percent to 24 percent,2
keeping rates on hold  looks right for now but  the editorial went on … the bank must also worry about its credibility if  the public ceases to believe that it will bring inflation back down then it  will become much harder to do so2 this  risk applies to the fed just as much as it does to the bank of england,0
the benefits of a tax cut of increased public spending are felt within a few weeks or quarters,3
housing starts in september rose by 90 to a seasonally adjusted annual rate of 154 million units,0
in addition many firmsespecially in the most troubled industrieshave retired debt via equity offerings and asset sales helping to hold growth of total nonfinancial corporate debt in 2002 to its smallest gain since the early 1990s,1
others influenced by the now wellknown research on financial crises by economists carmen reinhart and kenneth rogoff argued that the correct historical comparison suggested a much slower pace of recovery,2
business leaders and educators should join forces to better understand the role of education in providing the raw material for future innovation,1
banks would also have to adhere to the qualification standards set by supervisors,2
the founders of the system recog nized this duty by requiring the fed to account for its stewardship to the congress,4
in addition we receive what is  known as the blue book which deals with banks and reserve movements,2
basic economic theor y tells us that job creation depends primarily on the state of the macroeconomy with a relatively small and mainly transitor y effect from trade,0
the data are pretty consistent with what i have been hearing from my directors and other contacts for some time businesses that primarily supply the consumer sector have been experiencing stronger demand than those that primarily serve other firms but lately business spending has improved,1
on the liability side a thrift institutions balance sheet can seem rather cluttered reflecting the greater flexibility of new sources of funds and the offering of new financial services over recent years,2
the largest increase in contingent work over this time has been among workers whose services are contracted out by another company which rose from 06 percent to 31 percent of the workforce,0
nondiscrim ination and alternatives once the question of entry is s e ttle d  what ground rules should regu late the operations of foreign banks,2
shouldnt the federal reserve take some of the liquidity tail risk to facilitate intermediation of illiquid credits as was intended at our founding,2
to seek an immediate solution by drastically slamming on the money growth brakes would have a shocking effect on the economy in terms of lost output and high unemployment,0
from the late 1960s until 1979 the fed sometimes targeted money but used accommodative control procedures employing the fed funds rate to do so,4
however the immediate progress will be slow i expect that the unemployment rate will be between 8 percent and 85 percent by the end of the year,0
half of the entire banking industrys assets are now on the books  of five institutions,2
i can assure you that monetary policy makers are fully committed to acting as needed to withdraw on a timely basis the extraordinary support now being provided to the economy and we are confident in our ability to do so,4
to prevent our policies from having these perverse effects we should consider a gradual increase in the cost of borrowing from these facilities to discourage their use and encourage other participants to return to these markets,2
even today roger said that there are three times more pigs in the county than there are people,1
the problem of course is how to balance insufficient protection against too much to achieve a proper compromise between caution and enterprise between the safety of a strong cash position and the growth that borrowing makes possible,2
the move toward unifying that large market is underway as the nearly 300 separate trade barriers maintained by individual nations are being dismantled,1
so just as better educated people can make our workforce more productive they also can make for smarter consumers and savers,0
three lessons for monetary policy in a lowinflation era journal of money credit and banking vol,4
first consultants often find themselves acting as change leaders attempting to get their clients to take greater business risk based on consulting judgment,1
the association is working on a booklet which will explain the fundamentals of export credits documentation custom regulations and many other technical problems involved in export business,1
moreover with the additional capital available at banks to absorb the inevitable hedging misjudgments reversals of fortune are likely to create less disruption to the banking system relative to the disruption possible at fannie and freddie,2
these are steps that the private sector must lead and they have but it is important that the public sector encourage the development of sofr markets where it can,3
but the conduct of fiscal policy should not stop there,3
with the unemployment rate still very high  and inflation low the federal reserve embarked on a long journey through terra incognita of unconventional  monetary policy actions including largescale asset purchases and forward  guidance on the future path of interest rates,4
such firms enjoy implicit  subsidies relative to their nontbtf competitors,2
the risk of course is that sluggish job growth  or worse  continued job losses in the near term could undercut the apparent recent revival of consumer confidence since confidence depends in no small measure on peoples perceptions about their job prospects whether they are currently employed or not,0
quite aside from questions of ecuity the predominance of extended vesting provisions has an adverse effect on labor mobility,0
in either situation private processors might  have found it too costly or risky to serve these banks,2
for example we are using a multidisciplinary approach to develop an enhanced quantitative surveillance program for systemically critical institutions,2
we worked hard to earn that trust,4
however the committee itself consists only of the governors the president  of the federal reserve bank of new york and a rotating group of four other  presidents currently cleveland richmond atlanta and san francisco,4
among the pricing decisions that the federal reserve makes one of the most important for the future of the ach may well be the way in which federal reserve float is handled,2
fifth developing countries should move to strengthen their financial infrastructure improve the efficiency of financial intermediation and ensure that the regulations and incentives for proper credit assessment and monitoring are in place,2
you might notice that i did not mention defense cutbacks as a negative longterm factor,3
residential construction also has been robust,0
credit supply factors have also likely contributed to the decline in overall credit card outstanding balances,2
more generally the movement toward quantifying the performance risk and community impact of cdfis is essential to the growth and sustainability of the field in my view,0
these developments relating to work attitudes and the amount of leisure time we are opting for as a society are a relatively neglected aspect i believe of scholarly investigation into the causes of the slowing in our productivity growth,0
c  on the other hand when the fed lowers the discount rate commercial banks can have more funds available to lend,2
almost everyone would say that this manufacturer probably concentrates on paper clips rather than produce all three products because he finds it profitable to do so,1
in some cases postmerger integration skills are found wanting as the challenge of providing seamless service while integrating disparate back offices and branch networks proves to be beyond the skills of management,2
the significant process protections in laws such as the apa are also meant to ensure fairness,0
when we talk about the interplay of monetary policy and financial stability i think that this kind of tradeoff is an important part of what we should be bearing in mind,0
the fomc anticipates that two criteria need to be satisfied before it will be appropriate to raise the federal funds rate further improvement in the labor market and reasonable confidence that inflation will move back to its 2 percent objective over the medium term,0
to be sure if we persist in believing then  most assuredly the small town will die,0
the recession and the weak job market have swelled the rolls of medicaid participants,0
in these interactions with you in the workforce development community we heard a common theme there is a need for better coordination among employers economic developers and the workforce development community,0
thats why the fed is taking an active role in y2k communications,4
i commend hud for its responsiveness in using this information to make changes that help communities target nsp funds more effectively,0
for example the firm should demonstrate that its risk managers have direct access to top management and play a key role in decisionmaking,2
they called the dallas  fed for help,4
this evaluation should include a variety of scenarios and possible events that could cause a business disruption,1
the most well known of them is quantitative easing or qe and it plays a role in the last myth i want to address which is that the fed prints money,4
there are two basic reasons why i believe central bank independence is vital,4
its  important for consumers to know that it is not necessary to trade in  their old 100 bills for new ones,0
the denial rate at the fdic has been less than 3 per cent and at the comptroller of the currency less than 2 per cent,3
when they have  acquired banks with large market shares they typically have lost market share in the aftermath,2
the process begins with changes in the lending and investing capacity of commercial banks brought about by federal reserve control over bank reserves,2
2 looking further ahead the median age of the labor force is expected to rise steadily through 2060,0
i recognize that control of money is not absolute  especially over such short periods as a week or even a month,4
these are fundamental structural changes that involve governmental and oversight changes that go far beyond trade issues of course,3
looking at data for the entire business sector it appears that the slowdown in the growth rate of total factor productivity has continued,1
this happens as higher prices for  foreign goods dampen imports even as domestically produced goods become relatively cheap overseas and improve exports,1
70 march 1987in some interpretations of the period the collapse of the us money stock had promoted a loss of confidence and made a proper functioning of monetary policy very difficult,2
the summary was entitled assessment guide for us legislative regulatory and listing exchanges requirements affecting internal auditing,2
using their expertise the technicians often develop very complex solutions that by their very nature have a regulatory benta proposal to rely on market interest rates on intraday funds to reduce payment system risk i appreciate the opportunity to participate in the cato institutes conference concerning alternatives for governing the banking industry,2
insofar as any comments i might make would have an effect on the market i had no idea what these effects might be,2
smiths prescription of letting markets prevail with minimal governmental interference became the guiding philosophy of american leadership for much of our history,3
despite the s t a t e  s i n c r e a s i n g l y d i v e r s i f i e d economy oregon s t i l l  suffers  when scarce and h i g h c o s t mortgage money cut int o national housing demand and hence in to f or est pr od uc ts demand,0
the pressure on the markets could be relieved temporarily if the fed overshot its monetary targets but that would simply postpone any progress in the fight against inflation and might even worsen the situation,4
this tradition of locally oriented banks makes this country unusual among developed nations and i believe contributes significantly to our financial diversity and economic resilience,0
business investirent has surged higher and productivity trends have shown sane signs of improvanent from the poor record of the 1970s,1
given the fundamentals i think the blue chip forecast is reasonable,1
if it were each fifth of the families would receive 20 per cent of the aggregate income in each year,0
yet if adjudication were requested for more than a very small fraction of contracts our court system would be swamped into immobility and the performance of our economy would suffer,2
they began by lowering tariffs and then by introducing other marketoriented reforms such as combining tight monetary and fiscal policies with price wage and exchangerate controls,3
that innovation can come from outside the banking sector and we should not be surprised when it crops up in a commercial context particularly in silicon valley,1
there was much less concentration in check credit,2
theres some evidence that these shock absorbers are working,2
3 universal margin requirements these sorts of regulatoryarbitrage concerns have motivated some academics and policymakers to think about a system of universal margin requirements for sfts13 in its simplest form the idea would be to impose a minimum haircut or down payment requirement on any partybe it a hedge fund or a brokerdealerthat uses shortterm collateralized funding to finance its securities holdings,2
the institutions risk is confined to the credit risk on the assets,2
it is  therefore important that congress take three fundamental actions 1 reform deposit insurance 2 repeal glasssteagall and 3 enact interstate banking legislation,2
to insure that these objectives are consistent we have interpreted maximum employment as maximum sustainable employment or what we generally refer to as full employment,0
ill give you an example a contact of mine has a trucking repair business in pennsylvania and hes doubled the number of bays because business is so good,1
chart  total capital per farm united states and total capital less real estate appreciation  c ownership lc owneroperator equities in farms decline proprietors equities also down somewhat,1
instead the fomc has held its policy instrument rate the federal funds rate at the very low level of 1 percent,4
after reviewing the comments on the proposal the federal reserve in february 2006 approved a final rule very similar to the proposal,4
if bank a decides to issue more equity so it can expand its lending business this need not make it more expensive for bank b to satisfy its capital requirement,2
even when unemployment spiked during recent recessions the prevailing rate found its way to still lower levels,0
gross national product industrial production and personal disposable income are all at new high levels,0
despite some instances of heightened volatility financial markets have functioned reasonably well and risk spreads have stayed contained although uncertainty about upcoming elections has likely led to some increase in french and italian sovereign spreads in recent months,3
moreover while some bank loans undoubtedly have been repaid from capital market borrowings probably of equal importance was an effort to current minimizebank borrowing in order to preserve credit lines if monetary policy should again become restrictive,2
perhaps this earthquake analogy seems to be extreme but it is no more extreme than the idea that monetary policy can or should be used to eliminate the business cycle,4
positive increases  have taken place in education and manufacturing and in a few other instances the in creases in alabama have been relatively faster than in the nation,1
examples are the easymoney policy of the federal reserve after the return of sterling to gold in 1925 and the decision of the finance ministers of the united states the united kingdom germany france and italy taken at chequers in 196 7 to work jointly for lower interest rates,4
current measures to prevent speculation may have resulted from the original idea that such activities would absorb funds to the prejudice of productive commercial interests,2
3 an indigenous leader on the council regularly shares insights on the economic conditions and opportunities within indigenous communities,0
a large share of subprime loans that were originated during this time featured high combined loantovalue ratios and in some cases layers of additional risk factors such as a lack of full documentation or the acceptance of very high debttoincome ratios,2
in this fiscal year for example  federal spending will increase by about 44 billion  almost a 10percent increase,3
dollars created by one type of bank credit have the same purchasing power and the same impact on demand as dollars created by another type of credit,2
additionally job losses have meant lower incomes,0
when inventory profits come down the effect equals that of a cut in the corporate tax rate in that sense we have had a very substantial rise in the corporate tax rate which now is beginning to be reversed,3
reedy 2011 an overview of the kauffman firm survey results from 2009 business activities kansas city mo,1
transparency about methods should also help to reduce concerns about conflicts of interest that might arise from the fact that issuers of securities pay the rating agencies for their work in rating those securities,3
charging what now amounts to over 700 million annually to service users has helped to spur competition and on net has reduced reliance on the fed as a service provider,4
that important realworld consideration is often neglected in the academic literature in which central bank commitment devices are simply assumed to exist and be instantly credible on decree,4
design times and costs have fallen dramatically as computer modeling has eliminated the need for example for the large staff of architectural specificationdrafters previously required for building projects,1
cash managers have traditionally had four primary responsibilities,2
a third factor affecting deregulation will be the increasing competition from outside the banking and thrift industries,2
national economic outlook the recent recession was business driven,1
in addition there have been some striking changes in traditional labor market practices in several key industries changes made with a view toward holding down costs and increasing productivity,0
the excess physical capital that had developed earlier appears to have been worked off in most sectors and the need to replace older equipment has become more pressing,1
consumer installment lending and mortgage lending are conducted on an interstate basis by both independent and bank holding company affiliated finance companies and mortgage bankers and by retailers and nonfinancial companies as wellin addition two court decisions in 1980 expanded the range of permissible interstate banking activities,2
for this reason it is critical that monetary policy focus on nominal and not real economic and financial variables as policy indicators or targets,4
payments industry stakeholders have emphasized the importance of establishing a realtime payment capability for the nation whereby any payer can reach any payee regardless of which realtime retail payments system is used by their banks,2
indeed i ask you to join me in demanding that the cpas serve you more adequately in testing the quality of assets8 investment will be taken for granted as will your custctrrs participation therein through both simple and canplex syndications,2
according to administration estimates these tax cuts will put nearly 150 billion into consumers and businesses pockets in 2003 and 2004 third the federal reserves ability to maintain an accommodative monetary policy should help keep financing costs for consumers and businesses at low levels,3
are not our political and economic problems even more important,3
now that ive explained our dual objectives let me talk about how i  httpwwwclevelandfedorgfor_the_publicnews_and_mediaspeeches2012pianalto_20120301cfm4292014 14005 pm  keys to growth for the nation and the region  march 1 2012  federal reserve bank of cleveland  see the economy performing in the next few years,4
for example examining bonds maturing in approximately 10 years yesterday the indexed bond had a yield of 238 percent while a conventional treasury bond had a yield of 453 percent,3
im glad to continue the chicago feds involvement with the annual conference of the iowa independent bankers,4
a  b  v  consequently the fomc has broadened the array of variables that it uses to assess economic conditions and the impacts of monetary policy,4
beginning in the early 60s the fed sought to encourage     6  a higher level of economic activity by keeping interest rates artificially low,4
they have had the effect of directing or misdirecting economic growth by either substituting policymakers judgment regarding the distribution of an economys assets for the combined wisdom of individuals or allowing markets to send false signals,2
the economy still has 62 percent fewer jobs than in february 2020  still i am hopeful that we are on the brink of completing the recovery,0
let me simply remind you that some of the new assets are excellent substitutes for money others are not,2
at the beginning of every month the institute for supply management ism releases its reports for manufacturing and nonmanufacturing and so we now have those reports for april,1
but what the legislation does to keep us banks playing their international role while putting the banks on a stronger footing is also important,2
as mentioned above a voluntary program to moderate direct foreign investment by nonfinancial corporations administered by the us department of commerce was part of the same announcement,3
the establishment of the federal reserve in 1913 altered the nations payments system in three important respects,4
failure to plan transportation and land use regionwide can impede a critical asset of large cities the close matching of specialized and skilled workers with the unique labor demands of diverse bigcity employers,1
but as federal reserve chairman arthur burns has argued in several congressional appearances the longrun strategy calls for a gradual reduc tion in these monetary growth ranges in an attempt to unwind the inflation that still bedevils the economy,4
suppose that some portion of these claims say 20 percent were reduced in exchange for treasury bonds with the same present value,3
i culd like to be an optimist on this score but i shall defer to my colleagtte on the panel dr ture to supply an objective appraisal of fiscal prospects,3
a large majority of regulators indicated that they have issued specific y2krelated guidance to their banks and believe their banks are taking appropriate steps to address the issue,2
i am happy to say that the new monetary policy strategy delivers on these two fundamental principles with its flexible inflation averaging goal and explicit recognition for the need at times for policy to purposely aim for inflation rates higher than 2 percent,4
strategic planning  the example i just presented of how effective assetliability management committees and processes can support businessline strategies as well as governance is intended to illustrate that effective enterprisewide riskmanagement processes are not built just to comply with banking regulations or sarbanesoxley requirements,2
at each meeting the fomc sets an intended federal funds rate target,4
one needs to understand the business and risk management principles but that does not require a quant,1
in fact between blacks as a group and whites as a group blacks suffered all of the recessioninduced decline in jobswhile whites made further net job gains,0
the most im portant moneysupply measure m1b  currency plustransaction orchecktype accounts  increased 63 percent in 1980 4th a quarter4th quarter,4
recent studies suggest that large banks are less likely to lend to small businesses and are equally strict when dispersing capital to local governments,2
moreover if and as other firms outside that perimeter grow so as to pose similar riskswhether because of the migration of risky activities from the regulated sector or for other reasonsit will be important to apply prudential standards and consolidated supervision in a timely fashion,2
today for most institutions their ability to collect checks and manage the proceeds is essential to their financial well being,2
the watergate incident and its aftermath led to a general distrust of all institutions public and private,3
i will argue that there is a natural tendency for credit expansions like the one weve seen to lead to calls for new regulation,2
the number of bank holding companies has fallen slightlyabout 4 percentover the past decade but has increased a bit in each of the past three years,2
this restriction applies to governments buying gold from their own gold producers,3
the 2 million of reserve free demand deposits is worth about 12800 in  arnings  to each nonmember bank that has net demand  deposits larger than 2 million either as straight earnings at an assu11ed bqo or as an equivalent value of correspondent services,2
both rules highlight the importance of imposing a nominal anchor to pin down the longrun inflation rate and of varying real interest rates procyclically to lean against the cyclical winds,4
the mutual fund might then purchase a  1000 certificate of deposit from a bank which in turn might lend the 1000 to a finance company,2
in a few years the us babyboom generation will start to retire,0
although significant participation by nonbank institutional investors has long been a hallmark of us credit markets these developments have facilitated greater riskbearing by entities other than banks and other highly regulated depository institutions,2
while the deficits have supported and strengthened demand for goods and services federal goverrurent borrowing needs have drained off an extremely large portion of available net savings in the econorry,0
this forecast clearly has implications for financial conditions in the state,2
i believe the term quantitative easing is best reserved for a policy that operates primarily through the expansion of bank reserves,2
as things stand many builders fear that the soaring prices of land labor and materials could relegate the singlefamily home to the status of a museum piece,1
the deterioration in the labor market has not been evenly shared,0
i could never be the chairman because ive spent a lifetime trying to  learn to speak clearly and get to the point,4
much of the impetus for change can be traced to innovators surmounting the artificial obstacles to the markets will that is to say the cost of circumventing aging statutory constraints  such as regulatory ceilings on interest  have become far less than the gains in market share and profitability likely to be realizedthis relationship between the costs including opportunity costs to your customer of continuing to honor outmoded and uneconomic constraints and the benefits they were invented to bestow half a century ago has not changed simply due to the corrosion of time,2
it is important for consumers to have the information necessary to understand the features and risks of these types of mortgages,0
  however the underlying market pressures  are very strong and unlikely to be staunched by regulatory patchwork,2
my colleagues from the federal reserve bank of san francisco and i are especially honored to be hosting you in los angeles,4
1 see nba foundation inc financial literacy webpage,0
return to text   2 the longstanding special resolution powers of the fdic for insured depository institutions on which title ii was in part modeled themselves reflect some relevant peculiarities of banking and financial markets more generally compared to other industries,2
just as a more highly diversified loan portfolio reduces risk to the individual bank a more highly diversified banking structure reduces risk to the banking system as a whole,2
it gives one pause that some commercial bankers prefer relatively riskless investments to the making of business loans needed by their communitiesin contrast somebut not allbankers have long wished to be permitted to pay higher rates of interest on savings and time deposits,2
unless directed by society through specific mandate  tomorrows fomc always has the discretion to change the goal,4
in fact early last year the federal reserve took certain measures to restrain this rate of growth because it was very robust relative to our overall resource utilization and the potential of capacity to expand,4
return to text 10 the federal reserve also needs to consider whether privatesector stablecoins could disintermediate deposits out of the banking system but in general the risk of disintermediation should be lower for stablecoins compared to a cbdc,3
residential housing will probably register a poorer perform ance in 1978 than in 1977  singlefamily housing starts seem  close to their peak of 16 million units,0
and the philadelphia feds survey of professional forecasters does exactly what its name suggests,4
i knew that these things characterized americans then and know that they still do today,0
budgets at the municipal county and state levels are under a lot of pressure and are facing funding gaps that will need to be addressed,3
to an extent this approach is reflected in the house bill and other proposals that would require standardized overthecounter derivatives to be cleared through central counterparties or traded on exchanges,2
just how poor the trend of profits has recently been is clearly indicated by the fact that in each year from 1968 through 197 5 the aftertax economic profits of nonfinancial corporations from domestic operations were in the aggregate consistently below the levels reached during 196 5196 7 a new high level of these profits was indeed reached during 1976 but even that achievement is decidedly unimpressive when profits are expressed as a rate of return on the amount of equity capital in use,1
a second role of the federal reser ve is to prov ide ser v ices to financial institutions and the gover nment,4
as a result of these mixed trends during the first year of recovery the level of unemployment among blacks rose substantiallywhile joblessness among whites registered only a slight increase,0
therefore we would still have some slack in labor markets at the end of next year according to the consensus,0
also notable is the fact that the substantial easing of monetary policy during 2001 appeared to generate no concerns about future inflation as evidenced by the record low longterm interest rates and stable surveybased inflation expectations that we are still seeing,4
to  reach their full potential however they need lots of new capital equipment to work with,1
the dallas fed bought a few chairs and  tables hired a staff of 27 at an average pay of 30 a month and on nov 16  1914 opened for business in a space rented at 1309 main stpresumably  painting federal reserve bank above its office door,4
decisions to save by acquiring financial assetsand specifically earning assets of a depositary typehave experienced a significant increase,2
this is particularly important since cre lending in recent years has occurred under fairly benign credit conditions and naturally those conditions are unlikely to continue indefinitely,0
the miss of the fomcs early 2012 forecast that i referred to earlier was within the interval,4
west virginia is a very special state where banking is concerned,2
my academic training has helped considerably by leading me always to focus on the underlying conceptual framework on which the legal procedural and institutional details depend,4
information from the federal reserve boards survey of household economics and decisionmaking or shed provides evidence of these disparities1 in the july 2020 responses to the shed many households reported major employment disruptions due to covid19 including layoffs reductions of hours or unpaid leave,0
a balance should be sought between commercial and residential property uses so that development proceeds with sensitivity to the social bonds that make up communities,0
at present national status is not  a p ractical alternative to state status for foreign banks,2
this hypothesis  builds on the idea that the heavy emphasis on exploiting new and expanding markets from 1995 to 2000 likely diverted some corporate management from the hard work of controlling costs,1
in this regard monetary policy has contributed importantly to the economic recovery and is designed to make a similar positive impact upon todays economic expansion,4
this has driven the spate of interest in experimentation and systemic reform to improve our schools especially for those students from disadvantaged backgrounds who have limited choices and opportunities in our current system,0
if these firms collapse what are the repercussions,1
congress might also want to require this group to issue periodic reports on the stability of the us financial system in order to disseminate its own views and elicit the considered views of observers outside the government,3
however that may be in dealing with a change in the status quo there is a basic presumption that any decrease in the number of independent banking units in a given market area will of itself decrease competition and increase the tendency toward monopoly,2
there are two ways to interpret this recent discrepancy between manufacturing and overall business productivity growth,1
in other words these individual mortgages are no longer held as assets on the books of banks or other mortgage originators but have been pooled,2
spending programs of all sorts  military and civilian appropriations grants to states and benefits to individuals  were downsized and restructured,3
from 1983 to 2000 employment increased at a 18 percent annual rate as estimated in the survey of households,0
federal deficits absorb savings from the economy and americans for whatever reasons dont save a very large proportion of their income,0
an  effective payments system also requires a great deal of cooperation among the providers of payments services,2
output has increased faster and unemployment has declined faster in the united states than in other major advanced economies,0
it also makes for obscurity in measuring the net benefits that may result5 uniformity in the structure and regulation of banktype institutions at the federal level would bring other benefits too,2
monetary policy should not be overly reactive in response to fiscal policy changes or other developments which have transitory economic effects,3
but we must recognize and accept that the environment changed on september 11 2001 at the same time i want to assure you that the approach taken by the fed and the other federal banking agencies is not one of zero tolerance and that supervisors do not issue enforcement actions against banking organizations because they have failed to file a single suspicious activity report,2
gdp has come roaring back after a record contraction during the first half of 2020 consumption housing and manufacturing are extremely healthy and workers incomes are rising,0
i cite these differences only to demonstrate the imperative need to achieve coordination of supervisory effort at the federal level,4
not only the private sector but the public sector as well has become more mindful of debt levels,3
central banks are assigned narrow but important mandates,4
for example leveraged buyouts proxy fights and competitive unfriendly tender offers,1
this is what economists mean when they say that the phillips curve is flat,0
i am sure you are all aware of certain banking organizations in this area and around the country that have reputations as aggressive competitors,2
they also are using much more working capital and they require more medium term credit to finance it,2
as risk premiums fall in an expansion asset values and capital investment tend to be boosted the economy experiences additional impetus remembrances of recession fade and risk premiums fall still further  sometimes to levels below any credible justification,2
1  a transparent accounting system is perhaps the most basic requirement for efficient financial markets,2
for smaller banks cost considera tions do not favor federal reserve mem bership,2
we must be cautious however in assuming that the more diversified banking organizations will be inherently less risky and hence less likely to be a source of systemic risk,2
with that in mind i want to thank all of you here today for the role you play in bringing your skills in research and analysis to the important work of rebuilding lowerincome communities,0
the zerobound story begins with the commonplace idea that monetary policy is concerned  with setting a shortterm nominal interest rate in the united states the nominal federal funds rate,4
so i am not divulging any great secrets in saying that ben  bernanke a careful student of the depression of the 1930s and other crises  had long been warning the secretary of the treasury and others that a more  comprehensive solution might be required,3
however in view of the rather revolutionary nature of the book entry concept it may be that at some point along the line legal questions will arise that are best resolved by federal legislation4this second step opened up an entirely new application for bookentry procedure the conversion by commercial banks of their customers accounts to bookentry,3
for example          the new technologies of securitization and credit derivatives help banks          better manage their exposure to credit risk by offloading some of their          risk to institutional investors who appear to be more willing and able          to bear it,2
many city leaders referred to the early 1980sa period when manufacturing jobs disappeared rapidlyas a wakeup call few cities in the study if any had a commercial legacy beyond that of a hardworking manufacturing town,0
think back though to 1966the year of the great credit crunch,2
hence the holding of farm real estate loans 1h ich are rclati vely nonliquid must be limited,2
we know that there often is a boost to productiv ity growth in the early stages of recover y as businesses demand more from their employees and trim fat from their organizations,1
from 1785 through 1935 when all federal lands were withdrawn from settlement the states or the federal government offered land from 1 to 2 per acre,3
as a result used car prices which had followed a slight downward trend in the years leading up to the pandemic jumped a record 10 percent in april,1
the president of the federal  reserve bank of boston eric rosengren has suggested that the fomc should  consider increasing the inflation target3 any such increase would translate into a higher longrun fed funds rate,4
after a short coffee break we have a staff presentation on the alternatives we face in setting monetary policy,4
business investment has been weak in the past six months or so even beyond the energy sector and investment in capital equipment is reported to have declined in the last quarter of 2015 and first quarter of this year,1
many of the companies that have attracted public attention in recent years due to serious breaks in controls failed to focus on process changes and critical investments in their risk management and control systems that were needed to successfully support their business plans,2
i plan to cast my votes at fomc  meetings accordingly,4
in a broad sense the fed must be part of the political process,3
i want to start first by conveying my own perspective on the importance of community banks,0
in fact from my vantage point as a former banker meeting cra requirements should be the natural result of an aggressive business development policy,0
under the present law only when certain triggering terms are stated must additional credit information be given,2
in addition to benchmark real interest rates being low risk spreads are quite narrow and lenders appear very willing to provide credit to businesses and households,2
if the nation finds itself in a period of financial instability because of an unexpected and rapid escalation of the financial problems faced by social security and medicare we will look back and wonder why with the vulnerability known for so long nothing was done to reduce it,3
fourth supervisory expectations for business continuity planning and disaster recovery are longstanding,1
fiscal decisions since they are necessarily long in the making may come at just the wrong time to improve business stabilityfor monetary authorities the most fundamental problem of timing is to foresee changes in the business climate in order to take compensatory action before the figures actually prove its necessity,3
such modest growth would imply little additional progress in the near term in improving labor market conditions which remain very weak,0
in addition the measured pace of rate increases gave the committee time to observe the progress of the economy and to adjust its plans and communications strategy accordingly1 to be sure gradualism was possible only because inflation expectations remained containedtestimony to the importance of a central banks retaining credibility in financial markets and among businesses and households,4
nonfinancial agencies remain major credit suppliers if credit is efficiently flowing into agriculture through the financial agencies the question emerges why do merchants dealers manufacturers and other nonfinancial groups continue to be a major factor in supplying farm credit,2
suppose that house prices increase relative to the prices of other goods and services because individuals become more patient and reduce the discount rate for future housing services,0
indeed in the sep the central tendency of the projection for the longerrun natural rate of unemployment has come down significantly from a range of 52 to 60 percent in june 2012 to 47 to 50 percent in june 2016a reduction of 12 to 1 percentage point5 we cannot rule out that estimates of the natural unemployment rate may move even lower,0
whether these emergency fiscal measures will ultimately be financed by increased federal borrowing or by finding offsetting spending decreases or revenue increases is still an unsettled issue in the congress,3
indeed i believe that market discipline is a particularly attractive tool for encouraging safety and soundness in a rapidly evolving environment,2
examples include the 3  financial markets  penn central railroad default in 1970 the continental bank insolvency in 1984 and the stock market crash of 1987 with the approach of y2k the federal reserve and other central banks looked more broadly at contingency planning,2
required reserves therefore are an important factor strengthening the demand  on the part of the federal reserve  for government securitiesa small number of large banks also enter the government securities market as dealer banks,2
in passing this bill the congress accomplished three important and occasionally controversial objectives,3
1967 and 1968 were the lush years of the decade for bank intermediation market shares were 44 and 39 per cent respectively compared to 26 per cent in 1960 monetary restraint in 1966 reduced bankings share to 25 per centa decade low,2
both of these shocks originated in economies with large footprints in the global economy and financial system and as a result they induced substantial disruptions in global financial markets,2
conclusion        overall the recovery in economic activity to date has been uneven and has not been sufficient to reduce unemployment noticeably,0
fortunately construction related to the mercedes plant is beginning to spur stronger job growth and higher property values elsewhere in the northern portion of the state,0
it may take  years o f negotiations to return to the degree o f free trade that prevailed at the outset even when protectionist policies are conceived as mere interim measures,3
too many people in finance and among the general public are unaware of the role financial institutions policies and structures have played in calcifying inequities in our economy,0
the federal reserve could try to lower interest rates by supplying money and credit more generously than it has,4
that is likely to be the case for equity extraction from home turnover as well,0
young firms account for a significant share of both job creation and job destruction,0
along with other changes in our banking laws in the 30fs the secretary was removed from the board,2
all this is readily available in the public record of congressional hearings of federal open market committee fomc meetings and numerous other public statements,4
following that advice from the beginning of the crisis the fed like other major central banks provided large amounts of shortterm liquidity to financial institutions including primary dealers as well as banks on a broad range of collateral10 reflecting the contemporary institutional environment it also provided backstop liquidity support for components of the shadow banking system including money market mutual funds the commercial paper market and the assetbacked securities markets,2
m a snapshot of the economy would always show some level of unemployment ó the result of inevitable frictions in the labor market,0
the fomc meets every six to eight weeks in washington but for me the policy process is an ongoing endeavor and starts at the chicago fed,4
however in 1991 and 1992 the core component of commodity prices excluding food fiber and energy components stayed in a range between 116 and 126 percent of the base in the first quarter of 1986,1
prices of imported goods are rising at a rate of about 7 percent,1
just as lessons learned from recent events can help bankers improve risk management practices they can also help supervisors further increase the effectiveness of the basel ii framework,2
in general having          a time limit to control caseloads is helpfulthe basic idea of unemployment          insurance is to provide temporary not permanent support to unemployed          workers,0
it can be all by itself  nor all by itself can  ho central banker ever claimed that it  it is important but it is not allimportant,4
lockhart says that the fomcs focus on forward guidance about the direction of rate policy reflects its increasing importance as a policy tool,4
only if we are prepared to take these  steps can we realistically hope that monetary policy will become a stabilizing rather than a disruptive force,4
in particular we closely monitor the labor force participation rate which is the share of the population that is either employed or actively looking for work,0
however the median fomc participant expects inflation to move up close to 2 percent this year4   regarding monetary policy the current setting remains accommodative with the federal funds target range at 112 to 134 percent5 this is about 100 to 150 basis points below the median participants assessment of where the funds rate will be in the long run after all of the various transitory factors affecting the economy have run their course,4
no doubt economists will long debate the appropriate institutional structure for financial stability authority,2
1  monetary policy and inflation  formance since the early 1990s was accompanied initially by declining inUFB02ation and more recently by low and stable inUFB02ation,4
why has ceo pay increased so much,0
in the case of the dollar shock considered previously these models suggest that the allin effects of the stronger dollar on gdp are only about onehalf to twothirds as large as implied by the trade model that abstracts from a monetary policy responsestill substantial to be sure but much less significant for the economy than if monetary policy failed to play an active role,4
strict limits or outright prohibitions on the feds ability to engage in 133 lending under a new fedtreasury accord would help restore a more explicit separation between 12  monetary and fiscal policy and help preserve the feds independence and the publics trust,3
at issue   however is whether the fomc would have responded so aggressively to these   shocks if it had been constrained by an inflation target,4
return to text 9  each fomc statement that used the considerable period language also discussed labor market conditions and the december 2003 statement tied the considerable period outlook for policy closely to slack in resource use,4
most major crises of the past have occurred when basically credit worthy firms went bust as confidence was shatteredthe federal reserve has tried in recent months to make certain that sufficient credit exists for all normal business situations,2
income grow th is fairly strong and employment has been solid,0
this implies a normal rate of growth which has to do with the saving that people are willing to set aside from their earnings and to invest in productive facilitiesyou and your colleagues in the farm credit agencies are grappling with some of the most difficult economic analjrsis of our times,1
this chronicle of expansion with the assistance of intelligent stabilization policies should be remembered well since it stands in marked contrast to the eperience of the succeeding three years,4
but the freeing of markets over the previous quartercentury had imparted a  flexibility and hence a resilience that enabled crossborder commerce to quickly stabilize and by early 2002 to resume its expansion,2
based on the lessons of the past i believe that later this year we would find aggregate demand would have remained excessive,1
however even with this program we have yet to see a sustained upward trend in sales,1
alternative benchmarks for monetary policy simple rules an alternative approach that i find helpful in evaluating the stance of policy is to consult prescriptions from simple policy rules,4
if they interfere with marketsthey retard prosperity,2
in other words the fomc can provide more current stimulus if people believe that liftoff will be triggered by a lower unemployment rate,0
although  the rate of capacity utilization is still relatively low business expenditures to install more efficient and modern equipment are already quite strong partly as a consequence of the tax incentives in the economic recovery tax act of  1981  also as the economic recovery  gains momentum abroad our foreign trade picture should improve somewhat even though the gains will be limited by the continued strength in the international value of the dollar,3
fortunately the southeast can depend on a strong underlying or longterm growth trend thanks to some regional factors that result in the continued inmigration of people and businesses from other regions of the country as well as a diversified economy and dynamic industries including the service sector,1
this leaves us with net exports as an engine for the expansion,1
the permanent increase in spending out of housing wealth is somewhat higher perhaps in the neighborhood of 5 percent and is financed in a different manner,0
first having more information on the underlying paths should help the public better understand the projections,0
by operational risk i mean the risk of direct or indirect loss resulting from inadequate or failed internal processes people and systems or from external events which is the definition used by the basel committee on banking supervision,2
thats the crux of the new community development process,0
apparently financial market participants thought the risks were larger than most macroeconomic forecasters and the fomc were thinking in december,2
these considerations refer only to the price stability objective,4
the fomc took an important step to solidify confidence in our commitment to price stability with its january statement on longerrun goals and policy strategy which formalized a longrun goal for inflation of 2 percent,4
 5 tourism will probably become montanas major single source of revenue before we have any major manufacturing revenue,1
of course there is another solution to the problem of management replace ment which banks of all sizesbut especially smaller institutionswill feel pressing on them like a vise from now on,2
within the u s adjustments can take place without too much hardship because there are no restraints on labor mobility and people can move where jobs are if jobs wont move where they are,0
this is the premise underlying title ii of doddfrank and i think it has also been the premise of thoughtful commentators who have proposed amendments to the bankruptcy code for application to large financial firms3 there are three key features of title ii and modified in certain respects some of these bankruptcy code proposals reflect recognition of the peculiarities of financial markets in a way the current bankruptcy code does not,2
to the extent that people who desire to work lack the skills that employers are demanding there is less slack in the labor market,0
products and services that serve these core financial needs are not consistently available at affordable rates to all americans,0
in september a prominent money market mutual fund broke the buckthat is was unable to maintain a net asset value of 1 per share,2
or consider if you will the automobile sector which while still depressed has also reported a rise in sales,1
residential investment was an important engine of growth in 2002 and   most forecasters as evidenced by the blue chip survey for example expect   that it will continue strong in 2003 inventory investment by contrast   is generally expected to contribute little in 2003 in contrast to 2002   when this component made a significant net contribution to gdp growth,1
between the second quarter of 1984 and the end of 1986 money as measured by ml accelerated to a growth rate of close to 18 percent,4
and the euro will encourage an increase in both the issuance of eurodenominated liabilities as well as in the demand for eurodenominated assets,2
the reasoning here suggests that a rapid rise in asset prices accompanied by a credit boom provides a signal that should lead central bankers and other financial supervisors to carefully scrutinize financial developments to see if market failures might be driving the asset price boom,2
if we persist in pursuing 2 percent and show confidence in our capabilities price setters will follow,4
thus consumer spending should remain fairly healthyeven at     3 moderate rates of income growth,0
community development is no  accident nor can there be economic growth without it,0
the natural next question is has the ccar qualitative objection for the largest firms also run its course,2
since i joined the federal reserve i have been on the road a lot visiting federal reserve districts and talking to bankers consumers and community groups,0
as you know the fomc discussed the pros and cons of establishing an explicit numerical inflation objective at the february meeting,4
i would like to see other industries with problems in competitiveness  emulate the textile industrys approach,1
montanas actual population during the 30year  period increased from 539000 to 674000 a gain of 25 per cent but the states population had it not been for outmigration would have been 784000 the report estimated outmigration from the state during the 30year period at 97000 the upper midwest is predominantly urban for the first time in its history,0
some of  you may wonder whether our elected officials faced with the truly monumental  task of balancing the nations books might simply throw in the towel and turn  to the fed to print us out of this enormous fiscal hole,3
indeed relative to gnp the volume of such credit appears to have returned to the record pace of 1978even after allowance for mergerrelated financings,2
but the common  interest between savings bankers and central bankers is closer,2
i look forward to working with you to make the financial system safer and stronger,2
twenty years ago the chicago fed had nearly 3000 employees today we have almost 1800 much of the recent reduction was in staff working to process paper checks and it has been the direct result of new payments technologies,0
because the fed appears to an increasing degree to be following a policy of what i have called constrained discretion one must ask is this policy approach consistent with the congresss mandate for monetary policy,3
that is we cannot forecast what our business practices and products will look like only a decade aheadover a period of time say in which your careers will have just begun,1
2 bea data show that monthly disposable personal income has been highly uneven over the past 18 months but is up on average since the pandemic started,0
gtl promises to add a good measure of flexibility in the way natural gas resources are utilized,1
supporting structural changes the technological changes inspired by investments in computers have enhanced the ability of businesses to reduce their operating expenses,1
i assure you that our longterm goal subject to the will of congress is to move to broader powers to assure the competitive position of united states banks both domestically and internationally,2
in many industries demand looks strong and capacity utilization is high,1
if these other factors are inflating the economy monetary policy should be deflationary and vice versaa third view is that monetary policy has a special obligation to defend the value of the dollar both at home and abroad,4
but the key point is that we see no great economic pressures that would force small banks to sell or fail,2
the rising tide created by economic growth does not necessarily lift all boats though it certainly helps most,0
large money center banks are casting a keen eye on their sources and uses of funding,2
in such a case in which the firms capital is negative the ownership of the bankrupt firm should be changedunless the owners succeed in mobilizing more capital in which case the company was probably not bankrupt,1
2  i would argue that we have now entered a third phase in the process of coping with the debt problem,3
the banks you serve are better able to reach new customers especially groups of customers who have historically been underbanked when they show that serving those customers is a top priority,0
counterparties that cannot obtain sufficient information should limit more strictly the amount of credit they supply through for example requiring higher margins,2
about a third of the surveyed firms in the district said they planned to share some of their tax savings with employees in the form of increased wages bonuses or additions to employee pension plans,0
without some kind of common understanding of what is necessary for adequate care or else some change in the way health care is financed the united states can only continue to spend an everincreasing percentage of gdp with no useful means to rein in the spending,3
there is really nothing new about the concern of monetary policy with the monetary aggregates,4
the primary responsibility for reassessing and strengthening the management of liquidity risk appropriately rests with market participants themselves but prudential supervisors working with central banks should carefully review the practices of regulated entities,2
a widely noted feature of this legislative effort is the fairly  broad scope for regulatory discretion,2
i  virtual el imination of balan ce of payments deficits,3
moreover the knowledge gained through  banking supervision aids the formation of monetary policy,2
it also means designing exit strategies that will allow us to end these lending programs and drain that liquidity in a timely manner,2
since early october financial conditions in the us have tightened,2
industries such as leisure and hospitality food  services and retail trade have high turnover rates11 theres also a question  about the longterm stability of these jobs as automation may displace many  lowskill workers in the coming decades,0
and a downturn in commercial real estate would of course affect the financial industry … et cetera et cetera,2
at that time there was a banking office for every 3700 people and banking was enjoying a golden age of prestige and affluence,2
once an organization qualifies it can engage in a widerange of new activ ities for example underwriting of insurance debt and equity financing and a full line of investment products,2
this same type of paradox faces black entrepreneurs in their search for qualified labor,1
thats why i urge you as industry leaders to keep pushing the analytics further both to improve the discipline and to assure regulators that you know how to run an internal risk based system,2
in short losers from inflation tend increasingly to be protected while those who profitexcept for taxationkeep their gainsthe result must necessarily be a more inflationary outcome for the economy as a wholefrom what i have said it must be evident that i believe inflation has become our majo,3
one way we are doing our part is by actively promoting economic education and financial literacy in our schools,0
we are concerned today as we have never been before in the history of this country with international relations,3
for example one of the researchers at the chicago fed in collaboration with other economists used unemployment records from pennsylvania to examine the earnings of workers before and after they were laid off,0
these  measures are comprised for the most part of provisions which were included in last years financial institutions bill,2
manipulating government spending tends     to be a rather clumsy way of dealing with rapidly changing economic developments while the process of reaching a consensus on needed tax changes usually turns out to be complex and time consuming,3
these developments have important implications for our benchmarks for the monthly employment statistics,0
those risks materialize when a clearing member defaults,2
but in doing so we must remember that the major advances in technologically sophisticated financial products in recent years have imparted a discipline on market participants excluding a few glaring exceptions not seen in nearly a century,2
this is where a sound risk management and internal control framework can be very helpful,2
thus i want to take this opportunity to emphasize and reinforce the case for central bank involvement in bank supervision made by chairman bernanke in a speech last month,2
standard macroeconomics  began with the notion that we could not explain unemployment with classical equilibrium models  in a nonstochastic frictionless classical model where agents optimize and  markets clear monetary policy is neutral,4
for a time those actions seemed to be reducing the pressures in term funding markets,2
however fiscal policy as measured by the annual federal budget deficit became more and more unbalanced,3
when cra was enacted the concern was that lowerincome communities did not have access to capital and financial services,0
the government estimates payroll employmentthe number of jobsfrom a survey of businessesthe establishment survey,0
it should be noted that all of these developments are by no means fully integrated as yet into banking or the broaderfinancial system but   6 rather are gradually becoming assimilated and so the full impact of these changes has perhaps still to be feltforces shaping bankingit seems to me that the basic causal factors reshaping the banking industry have been and will for the foreseeable future continue to be customer demand and bank management response thereto,2
schools have cut back on technical pathways,0
disclosures on card applications and solicitations in march 1989 the fair credit and charge card disclosure act amendments to the truth in lending law went into effect,0
our local presence gives us valuable opportunities to engage with communities across a broad spectrumfrom those who are thriving to those who are confronting challenges and from innercity neighborhoods to rural towns,0
the capital maintenance concept appropriate for bank accounting and reporting is financial capital in units of money,2
to ensure that banks use the facility only as a backup source of funds federal reserve loans are made at an abovemarket rate,2
the maturity profile of bank assets should be matched against the maturity profile of bank liabilities and should be reported in a manner and frequency which reveals the gross exposure to disintermediation,2
rebuilding can have a positive impact on the local economy  with increased construction and business activity,0
this focus of course is the essence of community bankingit is obviously impossible to predict with certainty the future course of banking consolidation and what that course may imply for your banks,2
workers are using their own laptops and smart phones or working remotely from home computers and this increases the entry points to the systems that need to be protected,0
as is well understood the existence of emergency credit facilities for financial market utilities could give rise to moral hazard for example in the form of insufficient attention by clearinghouses to establishment of privatesector liquidity arrangements in advance of a crisis,2
rural america and its relationship to the broader economy has changed enormously over time,0
increased defense spending during the 1980s contributed to the booms in places like massachusetts and southern california,3
finally it can be argued that much of the uncertainty has to be dealt with in other areas of government and monetary policy cant do much about this kind of problem,3
to achieve this the fed must make two important contributions to the economy,4
in the short run stock market fluctuations are far far larger than fluctuations in the nations production which we measure by the inflationadjusted gross domestic product gdp,2
it may make this difficult undertaking somewhat less intimidating if we remember that all balancing effotts of the type i have suggested cannot hope to be perfec the firancial and social inequities vhich i have described can i believe be reduced but in this prolonged struggle with inflcjtionary forces we cannot expect to be so skillful or so fortunate as to be able to avoid them entirely,0
not only do changes in tax rates and spending affect aggregate demand they can also affect  aggregate supply for example when they alter aftertax wage rates and aftertax rates of return to saving and investment,3
importantly the 64 metric used to size the appropriate capital buffer does not represent a new capital standard and is not expected necessarily to be maintained on an ongoing basis,2
to be sure adverse consequences for resource allocation and perhaps even for the stability of output and prices will occur if private agents overestimate the ability or willingness of central banks to damp volatility in asset prices or the economy,2
whatever the specific approaches chosen helping workers who have lost jobswhether because of trade or other causesto find new productive work is good for the economy as well as for the affected workers and their families,0
by prepositioning lossabsorbing resources in life and planning for an orderly resolution in the event of failure we can provide the policymakers who come after us with more options than they had in the great financial crisis if they are faced with future systemic financial stress,2
this years inflation in turn will add more fuel to the wageprice spiral which got underway in the late 1960s and which was not eradicated during the 196970 recession,0
during 1992 the region added nearly 300000 new jobs,0
the asymmetry in risk management stems from the combination of the likely low current level of the neutral real interest rate and the effective lower bound,2
with these reforms in place we can give banks expanded powers to compete headon with nonbanks and international competitors and banks can remain viable players in this increasingly competitive industry,2
wholesale and retail trade are not subject to the valueadded tax but are subject to a local turnover tax thus the french indirect tax system at present is a combination of a turnover tax and a valueadded tax,3
it was not only capital spending and equity prices that seemed to overshoot in the late 1990s credit was provided with undue optimism about prospects for repayment,2
greater price transparency facilitated by the internet may have increased consumer price elasticity and thereby dampened the responsiveness of inflation to resource pressures,0
in
 several states the unemployment rate is higher than the national average,0
equally important their emergence from isolation may mean that
 the world can begin spending less o f its energy and resources arming for war and more on
 raising living standards,0
grow we must if we are to have more jobs and higher living standards,0
the blue chip
 consensus expects monthly nonfarm payroll
 employment gains to average a little less than
 170000 in 2004 similarly the recent outlook
 survey by the national association for business
 economics projects that monthly job gains will
 average 150000 per month in 2004 these projected rates of job creation are well below those
 seen during the 1980s business expansion when
 payroll employment increases averaged about
 230000 per month and during the 1990s expansion when payroll employment increases averaged roughly 200000 per month,0
a large and rapidly growing labor force and low  education levels however have meant that border wages have remained low  relative to the national average,0
the cea chairman also stated that a real growth rate of 4 per cent should be sufficient to prevent the overall unemployment rate from rising above the interim target of 4 per cent,0
from 1965 to 1970 when the economic stimulus from the vietnam war was heaped on an economy already operating at high capacity rates consumer price increases went from l½ to nearly 6 percent but then subsided to 3½ percent by 1972 even that was considered disturbing and for a time we resorted to the crutch of wage and price controls,0
the dpartment of labor reported last week that major union contract agreements reached during the first nine months of this year provided for firstyear wage increases of just 38 percent excluding possible cola increases,0
the unemployment rate has risen by a half percentage point since march and now stands at 49 percent,0
the flexibility of our industry and workforce to reinvent themselves when the need arises forms the basis for increasing standards of living,0
elimination of excess den1and was an essential first step to the restoration of stability but this step has broght with it a period of sluggish economic activity slow income growth and rising unemployment,0
in collective bargaining situations it may be that management has learned to involve labor more in locating new plants and expansion of existing ones as well as the considerations which go into the downward adjustments of their productive capacity ünion leadership in industries under the pressure of very low capacity or deregulation have gone beyond concessions in wages and benefits and agreed to changes in work rules and other prerogatives lying outside compensationi believe that monetary policy has contributed to the reduction of inflation and even of inflationary expectations to sane degree,0
union leadership in industries under the pressure of very low capc1ci ty or deregulation have gone beyond concessions in wages and benefits and cigreed to changes in work rules and other prerogatives lying outside canpensation,0
here are examples of what i would look for
 first i would look for lower unemployment rates that are driven by increased flows of job seekers into employment,0
the shift from rapid to slower labor force growth will have important and lasting effects
 on the economy,0
both of these countries had surpassed prewar levels of industrial output by the end of 1952another significant difference is the higher rate of expansion of the labor force in germany and japan,0
the growth in the labor force is slowing reducing the potential growth rate of gdp,0
wages in major union contracts agreed to last year were down3 indicators of international econanic developments eg exchange rates,0
after all a lower value of the dollar is likely to raise the cost of imports which can feed into higher consumer prices,0
notably according to the professionals 
  even this performance is not expected to decrease the unemployment rate 
  by very much,0
in fact since january i have not changed
 my growth forecast for 2010 or 2011 i expect the recovery to gain traction in 2010 with
 growth picking up to about 3 percent and then settling down to its longrun steady state of
 about 27 percent in 2011
 the sharp rise in the unemployment rate in the first few months of 2009 and the steep declines
 in payroll employment have led me to revise upward my unemployment rate forecasts,0
i am not aware of solid analysis suggesting that 2 percent growth would produce a perceptible reduction in unemployment rateshie index of leading economic indicators also presents a mixed picture of the future,0
employment growth last year averaged a solid 220000 per month and the unemployment rate declined from 56 percent to 50 percent over the course of 2015 inflation ran well below our target last year held down by the transitory effects of declines in crude oil prices and also in the prices of nonoil imports,0
the concerns of these countries are legitimate but they should be balanced by an awareness of the costs and dangers of continued high unemployment and continued international imbalances,0
in an increasingly free trade environment europe and japan have been rebuilt america has enjoyed rising living standards and the ldcs  despite some recent setbacks  have built some foundation for sustained economic growth but only providing the environment for free and fair trade is maintained and enhanced,0
housing has not responded as much as was expected to the decline in mortgage interest rates  in part because of an offsetting tightening of credit standards by fnma mortgage lenders and mortgage insurers,0
construction of singlefamily houses has already
 been rising for more than a year in the wake of lower mortgage interest rates and the gradual
 absorption of the large inventories of homes built in the 1980s,0
if the market
 foresees a lower mortgage rate in the future then
 the current treasury bond yield will be correspondingly low relative to the current yield on
 mortgagebacked securities,0
there have been some times of relative prosperity when income has grown for most households but inequality widened because the gains were proportionally larger for those at the top widening inequality might not be as great a concern if living standards improve for most families,0
proposed restraints often are intended to protect consumers from their own poor judgment which makes them vulnerable to abusive lending practices,0
and going forward the recent strong gains in employment and income should continue to support healthy gains in consumption,0
most of us are happy that it has been
 
 possible to raise the social security benefits to retired workers,0
restructuring and participation 
 
 as the number of puzzles concerning the labor market increases so does the complexity of analysis necessary to relate observed variables to concepts relevant for monetary policy,0
the degree of slack in labor markets does have some effect on the rise of wages but it takes a painfully long time to workin todays economy any fresh impetus to inflationwhether it comes from rising opec prices a food shortage a productivity disaster or a mistake in economic policytends to worsen the longterm trend of inflation,0
even making allowances for the sharp runup in oil prices and the impact of increases in homeownership cost the rate of rise in the consumer price index was tending to accelerate,0
over those two years consumer prices rose by more than twenty per centthe first experience for our nation at least in modern times with double digit inflation,0
in the past 10 years during a period when population increased by 19 the
 
 labor force has increased 26,0
given the weak growth in employment
 so far this year we have not made even the modest progress on reducing unemployment rates
 that many forecasters had anticipated,0
moreover increases in food prices and in the prices of some imported goods have the potential to put additional pressures on inflation and inflation expectations,0
inventorysales ratios in real terms have declined to levels that are lower than at any time during the past five years and this might lead to significant further increases in inventory investment during 1984 the housing market seems to have shaken off the effects of the earlier rise in interest rates sales of new homes increased from september through november and housing starts and permits also recovered late last year,0
the feds success keeping inflation low helped provide the foundation for the strong economy and low unemployment rates weve experienced in recent years,0
it
 reduces the level of compensation built into longterm interest rates to make up for the
 loss of purchasing power due to inflation,0
that high unemployment rate is why the federal reserve is focusing its monetary policy at strengthening the recovery and job creation including keeping shortterm interest rates near zero and longerterm rates such as mortgage rates at the lowest levels in decades,0
perhaps just as importantly inflation and inflation expectations have become more stable since then as welldeclining inflation does not appear to have come at the cost of slower growth or high unemployment,0
in the meantime employment will continue to grow in health services delivery,0
the left fork is a continuation of the status quo or worse a rollback of insurance and securities powers for the banks which have not only been prudently managed but have resulted in better service to corporations and greater convenience and lower prices to consumers,0
a third purpose is to provide data to assist in identifying possible discriminatory lending patterns and facilitate the enforcement of antidiscrimination laws such as the equal credit opportunity act,0
historically the hmda reports have focused on the geographic distribution of home loans both home purchase and home improvement,0
they also raise questions about the performance of lenders in meeting their obligations under the community reinvestment act crai can assure you of the federal reserves longstanding concern about these issues and strong commitment to enforcing compliance with fair lending laws,0
that topic is discrimination in mortgage lendingor more specifically as your program notes detecting discrimination in mortgage lending,0
w e initiated these forums in order to exchange ideas about h o w to foster economic
 development and equal access to credit in low and moderate income areas,0
over
 the course of the recovery by contrast the labor force has grown by an average of about 05
 percent,0
business policies labor contract bargaining and government programs are all set in terms of augmenting money income to maintain purchasing power rather than attempting to achieve similar results in real terms by reducing costs and henceprice pressures,0
the very rapid increase in mortgage interest rates in recent months has resulted in a precipitous drop in new housing starts in march starts of single family houses were close to a record low for the postwar period,0
reflecting these changes t black unemployment rate rose further from 92 per cent in the last quarter of 1970 to 101 per cent in the final quarter of 1971 over the same period the white rate remained unchanged at 54 per cent,0
in countries that
 experienced a postworld war ii baby boom large
 increases in the labor force in the 1960s and 1970s
 reduced the dependency ratio and enabled
 increasingly generous transfer payments to retired
 persons,0
in part core inflation has been elevated because businesses have raised their prices in response to earlier increases in energy costs,0
and if workers expect high inflation they will ask for  higher wage increases,0
the lower trend of nominal wage increases over the past two years has because of the drop in inflation been consistent with higher real wages,0
structural productivity growth is a key determinant of the longerrun growth of output and increases in living standards,0
on the part of lenders and borrowers it leads to interest rates demanded and paid that reflect the lenders fear of losing purchasing power and the borrowers hope that inflation will convert nominally high into really low rates,0
most observers including myself judge this level of unemployment to be much higher than levels consistent with full employment and stable inflation,0
as you may recall we ended up
 with both high unemployment and high inflation and the sum of those two statistics
 became known as the misery index,0
for the long run there is no choice but that of a policy that can sustain both high employment and stable prices,0
because this expansion is solidly grounded in improving fundamentals i expect robust growth in consumer spending to persist as households see continuing improvements in job markets incomes and wealth,0
2 we were then most concerned with the high rate of unemployment that had persisted even during cyclical upturns,0
rising labor force utilization rates raise wage change relative to productivity growth,0
this suggests at least
 the possibility that we may be moving into a
 new era of decelerating inflation with the
 electorate insisting on bringing under control
 the largescale deficit financing and the ac
 companying overlyrapid monetary expansion
 during periods of high employment,0
economic theory suggests that energy price hikes of this magnitude should have an important contractionary effect on the economy by reducing the purchasing power of households and holding down business profits outside the energy sector,0
budget savings
 lets then take a policy change that raises the retirement age three months every two years or 125 years every decade and taxes all wages for both social security and medicare,0
based on the latest revision firms added an average of 194000 jobs per
 month in 2013 which is a somewhat better pace than in 2012 this consistent pace of
 job growth was enough to drop the unemployment rate to 66 percent in january,0
during the first year of recovery the unemployment rate fell an average of 14 percentage points,0
for individuals better education is correlated with lower levels of unemployment and higher wages,0
although the persistent high level of unemployment will tend to restrain inflation further the effect of resource slack on inflation does not appear to be as great as some previous episodes might have led us to expect,0
unemployment has dropped 
                           to 47 percent the lowest rate in four years,0
give the fed a clear mandate to preserve the purchasing power of the dollar
 and maintain its independence to do so and much of the current uncertainty about policy
 would melt away,0
now it is true that when i graduated the slack job market put  downward pressure on all wages including those of college grads,0
the monthly print corresponds to an annualized rate exceeding 10 percent while the yearoveryear increase was 62 percentâU0080U0094the highest since december 1990 despite the highest wage gains in years inflation this year has wiped out any real wage increase for the average worker,0
but now some combination of good luck and good policy has brought us an eight year run of strong growth declining unemployment and falling inflation and made the american economy a vital positive force in a turbulent world,0
we have real incomes rising which shouldnt be so unusual but two consecutive years of an increase in real income is unusual in terms of our economic performance in the i 970s vhich is a reflection of how dismal they really were,0
their costs meanwhile have continued to soar with increasing wage rates and sharply rising prices of materials,0
in its place arose the view that 
         government action was required to restore full employment,0
while unemployment remains high the overall demand for workers is gradually improving,0
inflation is simply
 a process involving erosion of the purchasing power of a nations
 money supply   that is simply a deterioration in the exchange
 rate between money and goods and services,0
americans have come to expect a continually rising standard of living,0
inflation erodes the purchasing power of wages,0
several daily and weekly retail spending indicators tracked by federal reserve board staff suggest that household spending increased quickly in response to stimulus payments and expanded unemployment insurance benefits,0
we need to ask for example whether we should be concerned with the degree of income inequality if all groups are experiencing relatively rapid gains in their real incomes though those rates of gain may differ,0
in the united kingdom the government has recently reached an agreement with trade union leaders to grant tax reductions in return for holding wage increases to an average of about 412 per cent during the year beginning on august 1 such a policy would involve some decline in real income for workers in the united kingdom,0
lets increase the minimum wage lets increase price
 
 supports for farmers lets restrict imports lets do this and that and the other thing,0
job levels are still not back to their prerecession highs and the
 states unemployment rate has been higher than the nations,0
my own prediction is that unemployment will remain above 8  percent into 2012 persistently high unemployment of this kind will impose  considerable losses on many of our citizens,0
both employment with 612 million new jobs created over the past two years and average real incomes have gained,0
in that context the average worker should be able to see his real income increase something that hasnt happened for five years or so,0
overall our evolving economic and financial systems have been highly successful in promoting growth and higher standards of living for the majority of our citizens,0
inflation redjces real incomes and va1je it tnreaten ojr ability to provide employment opportjnities it dries up job creating investmnts it impedes prodjctivity it breed recession it falls most neavily on those least able to bear tne bjrden,0
since the survey began in its current form in 1989 the scf has shown a rise in the concentration of income in the top few percent of households as shown in figure 16 by definition of course the share of all income held by the rest the vast majority of households has fallen by the same amount7 this concentration was the result of income and living standards rising much more quickly for those at the top,0
such a price spike effectively represented a tax that drained purchasing power from oil consumers,0
exhibit 2
 the birthrate of the postworld w a r ii babyboom generation reached its highest levels
 in the period 1957 through 1962 individuals b o m in those years reached working age between
 1977 and 1982 indeed the labor force grew sharply throughout the 1980s because of the baby
 boom,0
the two that are both current and perennial may be stated a b o u t
 as follows
 a monetary policy like broad economic policy claims to be concerned
 with economic growth high employment and price stability,0
first i expect upward pressure on wages from the prevailing tightness in the labor market,0
along with somewhat higher mortgage rates the inventory of unsold new singlefamily homes has increased steadily to nearly six months at current sales rates,0
further more we are confident that all of this can be accomplished while continuing to protect the public interest  our ultimate goal,0
in sum once we get through the nearterm weakness caused by the extra downleg from the housing contraction and any spillover from tighter credit conditions i am looking for moderate growth with high levels of employment,0
indeed if wages are much stickier than prices the best strategy is to stabilize nominal wage inflation rather than price inflation thereby allowing price inflation to decline to achieve the required increase in real wages,0
consumer prices have risen more for assistance in the preparation of this paper i am indebted to mr christopher taylor and ms merphil kondo of the boards staff,0
in past periods of high unemployment much of
 the burden was carried by heads of families fulltime
 workers whose loss of employment was a serious hardship for adults
 and their children as well,0
labor market conditions continue to be very strong with abovetrend job growth and very low unemployment,0
response of unemployment and prices to declines in economic growth some of the analytical work i have done suggests that a significant impact on the pace of inflation can be achieved only if we are prepared to see the economy run well below capacity including a somewhat higher level of unemployment for quite some time,0
this is translating into very small increases in wages and salaries as measured by the employment cost index they rose just 112 percent for the past year  the lowest recorded increase since the series began in 1983 consequently we are not seeing any upward pressure on prices coming from labor costs,0
standards of living rise because the depreciation and other cash flows of industries employing older increasingly obsolescent technologies are marshaled along with new savings to finance the production of capital assets that almost always embody cuttingedge technologies,0
ever since the korean
 
 war american families have experienced an increase in the purchasing power
 of their paychecks,0
four percent cuts exactly in half the purchasing power of the dollar in
 18 years which means that the parents of a baby born today has to save exactly
 twice as much in order to pay for a years college as they would if there was a
 stable purchasing power of the currency,0
in still shorter words it is to provide more jobs and more goods combined with a dollar of stable buying power which implies that there can be no economic equilibrium unless the dollar is stable,0
low and stable inflation together with  a steady peso has protected the purchasing power of the mexican consumer and  allowed nest eggs to grow,0
i have defined its goal as follows to foster orderly economic growth and to sustain employment at consistently high levels,0
i do not accept the analyses which point to the
 food price increases the petroleum product price increases
 or other special factors as causes of the underlying
 inflationary trend,0
since 1965 when inflation has been most intense
 overall consumer prices have risen at an average 44 percent
 annual rate while the cost of home ownership has risen at a
 67 percent pace,0
one approach was
 to argue that since taxpayers would have 13 billion less purchasing power
 as a result of the tax increase and the federal government would spend
 6 billion less than otherwise a total of 19 billion would be taken out of
 the spending stream,0
at best it is a shortterm fix at a cost of lower standards of living for the
 nation as a whole,0
the feds ultimate goal is maximum sustainable growth and a higher standard of living for everyone over the long term,0
in this way stability of purchasing power helps us to profit from past experience and to plan our future actions,0
for example in 1958 in the manufacturing sector only 7 per cent of the total employment was in firms with fewer than 20 employees while over threefifths were employed in firms with more than 500 employees,0
9 source equal employment opportunity commission,0
as the overall economic expansion accelerated during 1961 and 1962 white workers found increased employment opportunities at a rapid pace but it was only after a substantial lag that nonwhites had an opportunity to share in the gains,0
while it is difficult to know with precision how much slack still remains i am seeing more evidence that labor markets are tightening and wages are accelerating although at a measured pace,0
the official unemployment rate has more than doubled
 from 32 percent in december to 66 percent in june,0
2 the  discussion in this paragraph is largely consistent with the following quote  from chairman bernankes response to a reporters question in april about the  feds ability to lower the rate of unemployment more rapidly even purely from  an employment perspectivethat if inflation were to become unmoored inflation  expectations were to rise significantly that the cost of that in terms of  employment loss in the future as we had to respond to that would be quite  significant see transcript of  chairman bernankes april 27 2011 press conference p,0
employment in aerospace and related industries dropped by 2 per cent
 or more but californias total employment in that period increased at least
 3 per cent and total personal income rose at least 5 per cent,0
todays tight labor market presents a great chance to connect more people to jobs including people who might have had difficulty finding employment in the past,0
mining and oil personal
 
 2
 
 
 
 
 
 one of the big increases was in personal income from government
 federal state and local  from 89 per cent to 138 per cent,0
on the other hand i am personally convinced that blacks would do well to look more to the private sectorand less to public payrollsfor expanded job opportunities in the years ahead,0
personal income growth has been relatively slow in comparison to consumer
 spending and debt ratios look high from some standpoints,0
after a good deal of debate and another six years the congress embodied this right with reference to the cost of credit in the consumer credit protection act,0
in particular bringing overall inflation immediately back to the low rate consistent with price stability could be associated with a much higher rate of unemployment for a short time,0
therefore workers will continue to find jobs in the expanding service and trade areas so
 that the regions total employment should increase by about half a million new jobs in
 1987
 constructionthe other populationdriven economic sectorwill not however do
 as well as one might expect given the anticipated amount of population expansion,0
the combination of rising employment and rising wage gains has supported substantial income growth  over the last four months for which we have data real personal income has risen at a healthy 54 percent annual rate,0
although the pace of payroll gains has moderated recently unemployment is at a 50year low wages are growing participation in the labor force has expanded and unemployment insurance claims are at cycle lows,0
according to the household survey the labor force participation
 rate has actually declined significantly since the official trough of the
 cycle from 667 percent of the workingage population in november 2001 to 659
 percent in march 20044
 from its peak last june the unemployment rate has fallen by 06 percentage
 point from 63 percent to 57 percent,0
in may the unemployment rate increased for the fifth consecutive month and reached 5 per cent of the civilian labor force,0
so it is likely that the natural unemployment rate is lower than it was in the early 1990s,0
with the rising level of personal income there has been an increase
 
 in the demand for trust services and the trend will continue,0
during the recession and immediately after the losses in wealth may have put upward pressure on labor force participation the persistently weak labor market may have subsequently contributed to more retirements and thus put downward pressure on participation,0
the benefits will accrue
 
 expanding industries in the
 
 export field will also increase job opportunities in your state,0
we see the current stance of monetary policy as likely to remain appropriate as long as incoming information about the economy remains broadly consistent with our outlook of moderate economic growth a strong labor market and inflation near our symmetric 2 percent objective,0
dangers can also arise of course whenever there are efforts to circumvent regulatory actions taken to promote the public interest,0
so we promote public confidence in this system and improve its efficiency through bank super v ision and by our active involvement in the operation of our nations payments system,0
the productivity increases of the past have brought us
 
 our present high standard of living and further increases are necessary
 for providing us with the supplies we need today at stable prices,0
the increase has substantially pushed up homeowners mortgage payments in relation to their income in spite of historically low mortgage rates the growing use of interestonly mortgages and the lengthening of average loan maturities over the past few years,0
while the unemployment rate is lower than the level that is sustainable in the longer run inflation is near 2 percent and does not show signs of appreciably rising,0
i dont find the nairu concept particularly useful and using it gives the false impression
 that you prefer higher unemployment rates,0
c finally the international market calls for vigilance against the sentiment of
 protectionism that would inevitably erode the relatively open commerce which
 has raised standards of living around the globe during the post world war ii
 era,0
like many communities and regions chicago and the midwest must continually reinvent themselves if they are to sustain their high standard of living and their size and importance,0
importantly to get the economy moving these solutions must be effective enough to restore public confidence,0
for example the increase in home ownership is consistent with the development of parsons place a partnership led by the emerson park development corporation epdc to create affordable housing which is viewed as a catalyst for east st louiss economic comeback,0
in particular for the nation as a whole the rise in house prices 
  appears to have closely tracked economic fundamentalsincluding rising 
  household incomes high rates of household formation and historically 
  low mortgage interest rates,0
on the one hand we may need to tighten somewhat further if currently unexpected tailwinds emerge that push the economy too far beyond sustainable growth and employment levels potentially leading to unacceptably high inflation beyond our symmetric 2 percent objective,0
funcid173damentally ours is a society wedded to the competitive proccid173ess as a chief safeguard of the public interest,0
oust because we now know that part
 
 of the reason for higher unemployment rates is the larger p r opor
 tion of teenagers in the labor force doesnt mean that teenagers
 are any less unemployed in fact the opposite,0
here are obvious elements of monopoly in labor markets which tends to make for large wage increases bearing no relation to productivity gains,0
solutions 
           many solutions have been proposed to deal with this interrelated set of social security problems,0
many of our key exports are  capital goods and overseas growth is especially rapid in the emerging  economies that are equipping increasing numbers of their workers with uptodate  capital goods,0
thanks to the lowest unemployment rate in 50 years and
 growth in wages consumers are upbeat about the economy,0
the essence of my inflation outlook is that  despite recent and anticipated falls in the unemployment rate i dont see such  pressures at this time,0
as a result there may be greater reluctance to pay up for labor even when labor markets are very tight given the difficulty in passing on higher wage costs in higher prices,0
the best gauge of the strength of new jerseys economy is the solid growth in jobs that we have seen in the
 last few years and the tightening of the labor market,0
the recovery of house prices has increased household wealth,0
and with the unemployment rate at the lowest level since the 1960s  both nationally and locally  you shouldnt have trouble finding a place to startpreparing these remarks ladies and gentlemen made me realize something i hadnt expected to confront,0
b in the past of course inflation usually started to accelerate when growth was so strong and the unemployment rate fell to such a low level,0
according to the phillips curve as the unemployment  rate falls the growing scarcity of workers should push up on wages and prices,0
the board has recently proposed changes to the home ownership and equity protection act hoepa and to hmda in an effort to enhance the publics and the regulatory agencies understanding of the home mortgage market in general and the subprime market in particular,0
this is despite considerable monetary stimulus and relatively healthy labor markets,0
our objective is to promote maximum sustainable employment and stable prices over time,0
on the monetary side the feds longerterm success in reducing inflation and inflation expectations the resulting decline in mortgage rates and other longterm interest rates and our shortterm policy easings over the last 2½ years have helped produce a financial environment that should sustain spending in the housing sector where it is already strong and encourage increased spending by both consumers and business firms,0
the other indicator of an imbalance between demand and supply growth is the gradual decline in the unemployment rate over the last few years,0
4 i prefer a discretionary monetary policy formulated and activated by
 the central bank  always toward the goal of sustainable growth high employment and a stable currency,0
journalists are critical in helping the public understand the economics of the mortgage market which has become more accessible yet also more complex than ever,0
also tighter labor markets are feeding into somewhat higher wage growth,0
consumption growth would
 weaken as downwardly revised profit expectations limit stock market gains
 thereby reducing household wealth and as moreforesighted consumers perceive
 that smaller productivity gains portend lower real wage growth,0
the rapid growth in household debt largely reflects a surge in mortgage borrowing which has been fueled by historically low mortgage interest rates and strong growth in house prices,0
still the sum of these improvements in labor market hiring and job search efficiency continues to be difficult to quantify,0
in the area of disclosure the federal reserve is responsible for writing the regulation that implements the truth in lending act tila known as regulation z  the purpose of regulation z is to ensure that lenders provide borrowers or potential borrowers with clear accurate and timely information about the terms and conditions of loans,0
while stronger financial positions have helped the extremely weak labor market has been a restraining influence on consumer spending,0
certainly these developments are noteworthy but they are not enough to explain the slow employment growth,0
viewed through this lens the slow rate of labor market improvement in 2015 is not all that surprising,0
as the labor market has weakened wage growth has tapered off,0
at the same time there are significant social costs associated with delaying the recovery in labor market conditions too long,0
large chart
 to be clear some  of this slow recovery in employment can be attributed to a key demographic  force an increasing fraction of the people aged 16 and over reach retirement  age every year,0
and weve seen solid job growth in business services leisure and hospitality and retail among other industries,0
in addition to opening export markets and encouraging domestic saving without restricting imports or erecting new
 trade barriers thought might be given to efforts to increase public understanding and reduce trade paranoia,0
despite the almost 2percentagepoint rise in mortgage rates on new originations from mid1999 to mid2000 the average interest rate on outstanding mortgage debt rose only slightly as did debt service,0
these phenomena are reflected in high vacancy rates and the proliferation of special
 rental discounts,0
much of the softness in our labor markets can be traced back to our manufacturing industries,0
these developments likely spurred homeowners to tap increasing home equity to finance consumer expenditures beyond home purchase,0
they are promoting stable prices and fostering maximum employment,0
nationally there are at least some encouraging signs of a pickup so far this year2 the fact that some large companies such as walmart and target have announced wage increases for their employees also might be a sign that larger wage gains are on the horizon,0
that reduction corresponds to lower living standards for many americans,0
conclusion
 
 summing up i am concerned about the rather slow growth the economy has had this
 year and the lack of progress in reducing unemployment,0
some commentators have expressed concern about the rapid growth in household debt in recent years,0
given the momentum of strong inflationary
 expectations and the usual lag with which policy
 actions work it should not have been surprising
 that inflation was not stopped in its tracks by the
 slightly restrictive measures taken in 1969 our
 banks model of the economy indicated in late 1969
 that price rises could not be halted quickly without
 incurring a severe temporary rise in unemployment,0
labor market progress this year as measured by the kansas city feds labor market conditions indicators has been notable with this index of 24 labor market indicators since december 2020 closing twothirds of its shortfall relative to its prepandemic level2 nonetheless factors related to the pandemic such as caregiving obligations and ongoing fears of the virus continue to weigh on employment and participation,0
and while
 the employment situation seems to have stabilized after 12 months of job losses it wouldnt surprise me to see some more months of slow job growth just as we saw
 in the 1991 recovery,0
these factors will no doubt
 slow growth somewhat but with the job market improving and the momentum of the expansion at our backs
 moderate growth in consumer spending is the most likely outcome,0
however to my mind some uncertainty about that
 sustainability remains arising primarily from the slow recovery of the labor
 market,0
part of the reason consumer spending was able to grow more rapidly than income over that period was the rise in household wealth,0
if the decline in manufacturing and the increase in outsourcing are not to blame what else might have caused weak employment growth,0
this consensus statement serves as a quasiconstitutional document that clarifies that the committees inflation objective is 2 percent as measured by the annual change in the pce price index that this objective is symmetric that the maximum level of employment is largely determined by nonmonetary factors affecting the structure and dynamics of the labor market and that the committee will take a balanced approach to promote its objectives of maximum employment and 2 percent inflation under circumstances in which the committee judges that those objectives are not complementary,0
focusing on workers displaced by trade in particular kletzer 2001 found that job losers in industries facing high levels of import competition were slightly less likely to be reemployed and experienced greater earnings losses at about 13 percent on average than workers displaced from industries facing less import competition,0
this year monthly job gains have averaged 180000 below last years pace but still sufficient to reduce labor market slack,0
it also allows us to identify those industries that have had upward trends but that have experienced a period of relatively weak job growth in recent years,0
but we could improve the publics understanding of our monetary policy strategy if we provided more interpretation of those facts  namely our assessment of how recent changes in economic and financial data have or have not changed the mediumrun outlook the risks around that outlook and therefore the appropriate policy path,0
furthermore the income losses associated with a weaker employment picture would be a direct factor restraining consumer spending,0
confusion already exists because people qualify for full benefits under medicare at age 65 and full benefits under social security at an age nearing 66   as the nra increases for social security the disparity will widen and the confusion will grow,0
measures of slack such as the unemployment rate are often
 thought to prevent inflation from rising,0
h ow ever slowing growth in the labor force competition for investment funds from domestic
 and international sources and low er consumption are likely to keep overall growth from being
 as strong as in the 1970s and 1980s,0
and slower growth in the labor force will motivate employers to retain or attract older workersfor example through higher wages more flexibility in work schedules increased training directed toward older workers and changes in the retirement incentives provided by pension plans,0
in other signs of labor market conditions i expect job creation to remain strong in 2018 i should
 note that as the market continues to tighten we will eventually see job creation slow 
 ultimately if trends remain as they are we wont need much more than about 100000 a month
 1
 
 to keep up with population growth,0
most of the existing unemployment represents mismatch  that is not readily amenable to monetary policy1
 given  the structural problems in the labor market i do not expect unemployment to  decline rapidly,0
although declines in manufacturing employment are a part of the
 story they arent the whole story,0
when the labor market is tight the unemployment rate is below the natural rate and wages and prices tend to rise,0
  payroll employment fell slightly in both september and october,0
oil prices are near record levels food prices have risen rapidly prices for a wide range of commodities are up and dollar depreciation is among the causes pushing up import prices,0
they too concluded that mismatches accounted for only a small amount of the increase in the unemployment rate during the recessionon the order of 34 to 112 percentage points11           in sum i do not think arguments suggesting that structural factors account for most of the increase in unemployment are persuasive either individually or collectively,0
third because there is a plethora of incoming economic data and information which can send confusing signals our communications rather than merely providing an accounting of the changes in economic conditions should help the public to better understand policymakers consensus assessment of what is signal versus noise in the data,0
consumer spending will be damped by the effects on real incomes of a weak labor market and rising energy prices and by the effects of declines in the stock market and home prices on household wealth,0
sentiment was building on the fomc to raise the federal funds rate to head off the risk of rising inflation9 but chairman greenspan had a hunch that the united states was experiencing the wonders of a new economy in which improved productivity growth would allow faster output growth and lower unemployment without serious inflation risks,0
it is encouraging that we have begun to see some evidence of stronger demand for homes and consumer goods and services,0
however some important headwindsin particular constrained bank lending and a weak job marketlikely will prevent the expansion from being as robust as we would hope,0
community colleges serve those who have been hit hardest by recent job loss women minorities and young people,0
lockhart there has been broadbased evidence of steadily improving employment conditions with net payroll jobs being added at a monthly rate averaging 241000 jobs
 so far this year,0
yet previous recessions do not seem to have been accompanied by notable increases in structural unemployment,0
in fact by many nationallevel measures our labor market is very strong,0
instead we could promote financial inclusion more efficiently by for example encouraging widespread use of lowcost commercial bank accounts through the cities for financial empowerment bank on project11 could it be that a cbdc is needed because existing payment services are unreasonably expensive,0
in addition the indirect effects of the commodity price surge could be amplified substantially if longerrun inflation expectations started drifting upward or if nominal wages began rising sharply as workers pressed employers to offset realized or prospective declines in their purchasing power,0
although job cuts in the united states appear to have tapered off in recent months the share of jobless receiving extended unemployment benefits has continued to grow,0
still 18 months into recovery there are more than 7 million fewer jobs in the economy than there were just prior to the recession and the unemployment rate remains stubbornly close to its peak,0
were such step
 undertaken we would see a significant rebound in gnp growth and with that som
 significant declines in unemployment,0
a flat phillips curve has important advantages the labor market can strengthen a lot and pull many workers who may have been sidelined back into productive employment without an acceleration in inflation unlike what we saw in the 1960s and 1970s,0
return
  note that john haltiwanger argues that there has been a longerrun decline in labor market fluidity,0
that is about the same improvement as in the larger chicago metro area where unemployment has fallen to 812 percent,0
but to get most of the economic benefits from  college like the faster wage growth you have to stay a learner for years and  years and years,0
and wage growth is picking upearnings have increased 31 percent over the past 12 months and even more for lowerpaying jobs,0
civilian unemployment fell to 67 percent in
 december though and has held steady at that level through february,0
we have seen sustained strong job growth of about 175000 monthly over the past year,0
the next question the review will consider is are existing monetary policy tools adequate to achieve and maintain maximum employment and price stability or should the toolkit be expanded,0
in my view our current policy stance is appropriate given the outlook of growth near its trend pace solid labor market conditions and inflation rates not far from the fomcs symmetric 2 percent objective and given the risks around the outlook that we continue to monitor,0
consumer spending which represents about twothirds of output picked up in the second quarter supported by growth in personal income and continued improvement in household balance sheets,0
of course not all stickyprice firms  will raise their prices in lockstep with each other,0
finally i would note the possibility that inflation may rise more sharply in response to robust labor market conditions than anticipated,0
by the way the main essay in our 2000 annual report is about improving working conditions,0
i am hopeful that these efforts along with a continued strong job market will encourage more people to joinâU0080U0094or in some cases rejoinâU0080U0094the construction trades,0
with overall population growth continuing to slow and labor force participation not expected to rise we probably need to adjust our benchmarks for what level of employment growth is consistent with economic growth near potential and a steady unemployment rate,0
i see output continuing to  grow slowlyat  around 25 percent in 2013 and around 3 percent in 2014 i expect unemployment to  continue to fall only slowly down to around 75 percent in late 2013  and around 7 percent in late 2014 this level of unemployment will continue to  constrain wage growth,0
i would not underestimate the challenge of calibrating monetary policy to sustain full employment and reanchor trend inflation around 2 percent while adjusting to sizable stimulus at a time when resource constraints are tightening and the economy is growing above trend,0
2  and will a tight job market eventually increase pressures on wages,0
and the worse off have benefitted from stimulus checks enhanced unemployment benefits and forbearance,0
however under our new framework policy decisions going forward will be based on the fomcs estimates of shortfalls of employment from its maximum levelâU0080U0094not deviations,0
by focusing on eliminating shortfalls from maximum employment rather than deviations in either direction and on the achievement of inflation that averages 2 percent over time monetary policy can take a patient approach rather than a preemptive approach,0
by 1986 the unemployment rate had soared to 11,0
declining home and equity values worsening income prospects because of a deteriorating labor market and a general
 unease about the economy have strained finances in many households,0
  it looks as though employment growth will not be as strong as the ___ million new jobs we created in 98,0
meanwhile throughout the year firms were hiring workers at an impressive pace and labor markets continued to tighten the unemployment rate fell to 412 percent in the fourth quarter down from 5 percent at the end of the previous year,0
and finally in this regard as the engine for the top regional economic performer in the
 nation atlanta is enjoying healthy job growth as well as business expansion and relocation in both
 the service and manufacturing sectors,0
another sort of policy implication that i read from the
 growing problem of high unemployment among the young is the need
 to look closely at the minimum wage law,0
the first quarter saw strong employment growth and perhaps fairly weak output growth while the current
 quarter is witnessing a weakening in employment growth just as economic activity is accelerating,0
michael moskow speeches  1998  7  that seems to be a factor in the regions slower job growth compared to the nation during the past two years,0
the us lost 88 million jobs from the peak of employment
 in january 2008 to the trough in employment in february 2010 we have gained back
 35 million lost jobs or 40 percent but it will take some time before we once again see
 a truly vibrant labor market,0
so even  though employment grew it seems that there was an improvement opportunity the  fomc should have facilitated even faster employment growth,0
here again monetary policy would not be an effective tool to address such real
 economic challenges as slower labor force or productivity growth,0
i close my discussion of price stability by circling back to a question about the employment mandate that i posed earlier should the fomc have stimulated more rapid employment growth,0
i believe he agrees with me on the following
 new technologymainly information and communications technologyand new processes based on the new
 technology are driving an investment boom that is raising productivity increasing growth and reducing unemployment
 to 30year lows,0
productivity may be able to
 sustain close to a 4 percent growth rate even if employment growth slows somewhat,0
the reduced fear of job loss is likely to foster
 more consumer spending,0
nonetheless with stillsluggish job growth i expect this
 number to average out about where it currently is at a little under 7 percent for the year,0
for example when the housing industry suffers because of
 
 high mortgage rates erroneously attributed to tight control of credit by the fed we
 are inevitably called upon to attempt to lower interest rates by injecting additional credit
 and money into the economy,0
these include the cost
 
 and price increases associated with the minimum wage socialsecurity
 and unemploymentinsurance taxes the steel reference price system
 sugar and grain price supports postal rates energy policy the recent
 coal settlement and so on,0
and one in five manufacturing jobs disappeared in the region from 1979 to 1983 to their credit the remaining workers and businesses began to rebuild and restructure during the late 1980s,0
as a result of these challenges texas job growth slowed
 to approximately 13 percent in 2015 and dallas fed economists expect similar growth
 in 20165 this compares with the 36 percent job growth the state experienced in 20146
 while the texas energy and manufacturing sectors have been losing jobs the states
 service sector has shown steady moderate expansion,0
putting all these pieces together i do not expect a large increase in labor force participation,0
conclusion
 ultimately an equitable workforce recovery isnt merely a nice to have nor is it exclusively a moral
 issue for our society  though it is in my view precisely that,0
economic outlook and views on monetary policy
 to give you the punchline i think the outlook for growth in economic activity and the labor market is good,0
by either measure the rate of expansion should decelerate and as a result
 unemployment will probably decline less dramatically than in the last two years,0
our expansion was led by consumers whose purchases o f homes cars appliances and
 a myriad o f durable and nondurable items spurred businesses to increase production
 build their inventories and expand their work forces,0
and the feds actions have helped keep  unemployment from rising higher,0
meanwhile now
 that the babyboom generation has been absorbed into the work force and the number of
 new workers is diminishing labor markets have begun to show signs of tightening,0
if growth were to continue at last years pace while the number o f
 
 new workers declines labor costs would tend to rise in the absence o f stronger advances
 in productivity,0
it remains to be seen for example whether the trend toward consolidation and layoffs in
 banking communication transportation and other professional and business services has
 bottomed out,0
consumer debt service as a percent of income
 for example has fallen to levels not seen since 1986 as a result households are in a better
 position to purchase goods that are typically financed with credit and the cost of doing this is
 much lower than before,0
consumer debt service as a
 
 percentage of income for example has fallen to levels not seen since 1986
 
 as a result
 
 households are in a better position to purchase goods that are typically financed with credit and
 the cost of doing so is much lower than before,0
recent employment gains should also provide support for
 further increases in personal income and consumer spending,0
too quick an adjustment can cause too much pain and i personally believe policymakers
 must be attuned to these social costs,0
much of the decline in the unemployment rate over the past three years has occurred because the fraction of people who are looking for work has fallen,0
this puts upward pressure on employment and  prices,0
the cyclical part of inflation accounts for only about 40 percent of core pce inflation but it has continued to rise over the expansion as the labor market has continued to tighten,0
we noted that conditions in financial  markets were continuing to improve household spending was stabilizing but  remained constrained by ongoing job losses sluggish income growth lower  housing wealth and tight credit and businesses were making progress in aligning  inventories with stillanemic sales and were continuing to cut back on fixed  investment and payrolls,0
nevertheless even if we could ensure significantly more rapid productivity growth than we have seen recently there are valid reasons for wishing to avoid ongoing declines in the general price level,1
whether these pressures are in fact passed through to core inflation will depend on a host of considerations including the willingness of producers to absorb those cost increases and experience at least for a time lower profit margins,1
furthermore the growing number of wage settlements in excess of the wage price guideposts justify forebodings that rising unit labor costs might easily provide an impetus to still higher prices from the supply side of the equation,1
more recently however the prices of oil and other commodities have posted substantial declines nonoil import prices have edged down and the prospect of greater slack in resource markets and weak demand seems likely to restrain labor cost pressures and pricing power,1
these values amounted in the four states respectively in 1950 to 15750 18000 20830 and 27660the percentage of tenant operators decreased 36 per cent in minnesota 51 per cent in north dakota 42 per cent in south dakota and 47 per cent in montana indicating an increasing proportion of owner operators who need both investment and operating capitalchanges in operating costs are illustrated by the following wage cost increases ranged from 150 per cent in montana to 330 per cent in south dakota feed from 287 per cent in tiorth dakota to 530 per cent in minnesota and fuel and oil from 197 per cent in minnesota to 328 per cent in south dakotathese figures do more than illustrate the tremendous increase in credit requirements of the average farmer today,1
indeed when one factors the oil price effects out of the recent cpi data it appears to me that the underlying inflation rate still is in the 3 to 4 percent rangewith a risk that the numbers could start coming in higher when the effects of rising import prices start to become more pronouncedi do not want to leave you however with the impression that all is lost,1
given these circumstances some slowdown in business activity seems
 to be both likely and desirable in 1979
 
 further stimulus of the type
 
 experienced in the past year or so will not lead to further growth
 but only to everworsening inflation,1
reductions in interest rates usually expand credit and encourage firms to invest and households to borrow for durable goods purchases thereby stimulating aggregate demand,1
through the socalled wealth effect these gains have tended to foster increases in aggregate demand beyond the increases in supply,1
if real gnp growth advances because of increases in aggregate supply federal reserve attempts to prevent overheating would lead to suboptimal employment of resources and policy error,1
under this alternative worldview a string of adverse supply shocks is dangerous because it has the potential to cause rising inflation to become embedded in expectations,1
if productivity growth
 falters labor costs will increase more rapidly
 and at some point firms will attempt to recoup
 some of these costs in the form of higher product
 prices,1
the major objective of our monetary policy has been to create an environment conducive to a sustained recovery in business activity while maintaining the financial market discipline needed to foster price stability,1
in addition international supply chains made possible by advances in communication and transportation reduce costs and increase the competitiveness of us firms,1
last months further trimming of inventories in the manufacturing sector combined with a 25 increase in shipments brought the inventorytosales ratio in that sector to near the prerecession levels of early 1981 and should set the stage for further gains in production and employment,1
today the opportunity before us is to continue breaking away from a cycle of accelerating inflation depressed business investment declining productivity and loss of international market sharethe early characteristics of this recovery do not indicate a need to alter the direction nor the objectives of monetary policy,1
however these expenditures must be made in the face of todays high cost of capital both in the equity and credit markets2digitized for fraser httpfraserstlouisfedorg federal reserve bank of st louis2 how canfortable should forecastings past failures make you feel about the current consensus of business economists that real growth in 1984 will be near 5 percent and that inflation will run between 5 percent and 6 percent,1
both managerrent and labor have shown imagination and scm2 willingness to control costs through new efficiencies in production lower overhead and nore flexible work rules and hiring practicesan alumicid173num plant expands output with onethird less workforce a maintenance worker doubles both on the assembly line and the warehouse,1
we have also seen a leveling off a sustained
 
 business investment boom,1
productivity in the nonfarm business sector grew by 31 percent in 1983digitized for fraser httpfraserstlouisfedorg federal reserve bank of st louis4 inequities of limited private credit availability and growth that the econanic reefs and shoals could be successfully navigated,1
the question i raise is whether foreign competition higher productivity and present management and employee attitudes may have deferred reinf1ationthese analyses leave open the questions what would strongly rising business investment in equipment and plant really mean in terms of reinvesting in our society,1
their decline in turn would provide a powerful factor supporting and encouraging the business investment we need to maintain economic momentum and to support productivity growth7digitized for fraser httpfraserstlouisfedorg federal reserve bank of st louissustainable economic growth and prosperity requires public economic policies having multiple objectives,1
accelerating productivity allows wages to rise without
 comparable increases in unit labor costs and keeps costpush inflationif you believe in such a thingat bay,1
a decline in the tradeweighted dollar erodes the profit margins of foreign vendors and perhaps those of their distributors in the us this process is not likely to produce instant inflation however as sellers may accept smaller margins on sales to hold their shares of us marketsfinally let me note that some analysts became concerned that reinflation was suggested by the conroerce departments flash estimate for the first quarter of this year which showed the osip deflator advancing at a 512 percent rate confirmed by the revised estimate released last week,1
1in fact three or four tenths of the one percentage point increase are due to changes in how productivity is measured rather than to a true increase in productivity growth,1
reductions in europe in marginal tax rates such as those introduced in the united states in 1981 as ell as those proposed recently by president reagan have the potential to contribute to a revitalization of european econanies with rrore rapid growth in output and nost inprtantly jobs,1
industrial production has risen over 4 per cent a year since the spring of 1960 also a much better record than at any time since the korean war,1
the structure of the model starts with the standard textbook equation for aggregate demand for domestically produced goods namely2   rmad  c  i  g  nx next is the wageprice block which is based on a wage or price phillips curve,1
nonetheless the nature of the downside risks this time is different and it is not too difficult to envision a scenario in which adverse shifts in business sentiment and uncertainty over the outlook cause firms not only to reduce capital spending but also to pull back on hiring which then causes consumer sentiment and spending to weaken and unemployment to rise with inflation staying below our target because of weak aggregate demand,1
you know that employment and output growth has slowed markedly since mid84 despite declining interest rates and very rapid money growth,1
the counsel was not to fret that capital investment will be reenergized as aggregate demand grows,1
as we have seen the european countries have proven averse to
 stimulating domestic demand,1
with a changing mix of economic indicators though the goal remains the same contributing to further disinflation and building upon our progress to date  which has been achieved at such considerable cost in such difficult times9 is serious political discussion of measures to encourage their private sectors stimulate domestic investment and even reverse the flight of capital,1
to a first approximation one could assume that the rate of bias is constant and does not account for the estimated decline in productivity growth and that we should not dismiss the slowdown as an artifact of measurement difficulties3 that is the conclusion most researchers reach but the data issue is not settled,1
into this inflationary situation was added the massive 150 percent increase in the price of imported oil,1
during the past recession and recent
 recovery consumer spending held up unusually well,1
and more recently automobile sales in july picked up noticeablyan improvement in consumer spending and housing does not mean that the recession has ended,1
however the positive national prospects for single
 
 
 
 
 7
 family housing and increased consumer spending bode well for several other important
 southeastern industries,1
in that year with inflation falling domestic operating profit margins started to rise indicating that increases in unit costs were slowing,1
that meant using the tools of monetary policy fairly actively to combat recessionary tendencies when they appeared and to restrain the economy when the degree of slack in labor and product markets diminished to a point where pressures on wage and prices began to threaten,1
phase iv controls have a role to play here
 by limiting wage and price increases until
 broader policy restraints can take hold,1
progress against inflation will continue however only if we succeed in reducing the rise in unit costs of production particularly labor costs which amount to roughly twothirds of the total,1
industrial production fell 12 percent in both march and april and capacity utilization is under 75 percent,1
in addition business investment was strong last year boosted in part by a variety of changes to the tax code,1
the long advance in profits reflected probably more than anything else the absence of the imbalances in pricecost relationships which in previous expansions had produced sharp but shortlived increases in profit margins in the first year of rapid economic growth,1
this improved performance likely reflected the eventual recognition that productivity growth had increased on a sustained basis,1
as a result most of the growth in total output in 1956 flowed into business investment which expanded at a rate that cannot be expected to persist indefinitely,1
in september industrial production increased a full percentage point and personal incomes also rose,1
so far this year the rapid rise in corporate profits has carried them to previous highs in dollar amounts although as a percent of gnp and of sales they remain low compared to past periodsa general view would seem to be thatthe 55 per cent wage standard may translate into a 6 per cent rise in actual compensationif compensation rises by 6 per cent and output per manhour by 35 per cent then unit labor costs would increase by 25 per cent,1
third advancing technology appears to be an important driving force behind the exceptionally strong rise in business investment in durable equipment,1
a further rise in aggregate demand for goods and services is likely to induce a sharp rise of inventory investment given the present condition of inventories relative to sales,1
although the monthly readings have been volatile the overall data suggest that consumer spending picked up in the second quarter after being subdued in the first quarter,1
the amount of external drag on the domestic economy reached a peak in the third quarter of last year when declining net exports reduced the annual growth rate of real gnp by almost four percentage pointsa record for any postwar quarter,1
indeed it is my judgment that the rise in the real value of the dollar over the past four years has had a  direct depressing effect on aggregate demand for goods and services roughly as large as the stimulative effect of the increase since early 1981 in the structural deficit in the federal budgetlet me turn now to the role that monetary policy may have played in shaping the general contours of this recovery,1
moreover consumer price inflation rises due both to higher import prices and because the stimulus to activity raises the marginal costs of domestic producers,1
the weaker canadian dollar is boosting manufacturing activity and exports
 and consumer spending has been stronger than expected,1
3 other influences
 crop losses both here and abroad operated adversely on prices
 of agricultural commodities the continued depreciation of the dollar
 resulted in higher prices for imported goods ranging from wines to
 volkswagens capacity constraints reached in 1973 in such industries
 as plastics chemicals lumber and paper had a lingering effect on
 prices in 1974 consumer and business confidence was jolted by the
 disclosures of watergate and the strains evident in the financial system
 as reflected in the failure of the franklin national bank,1
during the first half of the decade productivity in the nonfarm business sector increased at an unusually high average annual rate of about 3 percent,1
business fixed investment grew by a little less than 6 percent a healthy number to be sure but far from a transformative year,1
but more importantly it reflects the strong domestic demand for goods and services as our growth continued,1
is slow domestic demand likely to be persistent or transient,1
this improvement has been reflected here at home in dollar depreciation higher earnings and stock prices tighter risk spreads and an increase in net exports which made a small positive contribution in the first half of this year after holding down gdp growth over the past several years,1
supporting this result ihrig and others 2007 conclude that correlations between real gdp growth and real domestic demand growth have declined in recent decades in the united states and several other industrial economies,1
new strategies to improve earning power and improve risk management will be required,1
in such a holding company additional powers would be granted to separate subsidiaries and the insured deposittaking subsidiary would be insulated from the risks of its affiliates by appropriate prohibitions or limitations on intercompany financing or transfers of capital,1
united states banks today find themselves faced with higher capital costs and higher funding costs than many of their competitors,1
reduced confidence in turn could undercut the moderate strength of consumer spending which would undercut any significant increase in business investment beyond ordinary replacement spendingto sum up on the outlook in all candor this is one of the more difficult situations to evaluate weve seen in recent years,1
at the local level we all understand the importance of such things as streets and roads or water and sewer systems that support private development and investment in housing in downtown development and neighborhood revitalization in industrial facilities and small business growth,1
the secap partners also noted that financial institutions should continue to strive to expand their small business lending to underserved areas,1
businesses have found it necessary to continue to downsize their work forces and to cut other costs to improve their ability to compete here and abroad,1
for example if labor productivity is increasing then companies can pay workers more and still not affect their profit
 marginsin fact they may even be able to increase their profits,1
during the two years of falling employment 
  productivity in the nonfarm business sector rose about 5 percent per year,1
if growth in overall output is going to rise substantially then we would need to see an increase in labor productivity growth or in employment growth or both,1
further out i admit to being a bit of technoenthusiast and i see the potential for many emerging technologies including 5g communications artificial intelligence and machine learning and 3d printing to further boost productivity growth in the coming years,1
michael moskows take a international experience should make us a little more skeptical of attributing the recent large acceleration in productivity growth solely to advances in technology,1
hence even a fairly sizable onetime adjustment in import prices b itself would not necessarily be a critical setback for our antiinflation effortsserious difficulties would arise however if the increase in import prices started getting built into the domestic economy through wageprice interactions or through expecta tional effects,1
in my remarks ill provide my personal views on these questions
 and ill offer some thoughts on state and local workforce development efforts as a way to improve labor productivity,1
in the year 1955 we enjoyed an extraordinarily high level of consumer expenditures for automobiles for housing and for many durable goods,1
a higher value of the dollar passes through to lower import prices which hold down us inflation both because imports make up part of final consumption and because lower prices for imported components hold down business costs more generally,1
high quality corporations to circumvent conmercial banks in securing credit,1
in a society such as ours which rightly values full employment monetary and fiscal tools are inadequate for dealing with sources of price inflation such as are plaguing us nowthat is pressures on costs arising from excessive wage increases,1
discussions about financial assistance for small businesses focused on the need for small loans for startup companies and the need to be vigilant against race and gender biases or discrimination in the small business credit market,1
these tend to squeeze profit margins hurt investment and generally cause misallocation of resourcesthe unfortunate fiscal and monetary policy mix which has caused us to fight inflation by tight money and then to offset its effects by easy budgets has also been adverse to investment and productivity,1
there is no escape from the logic that wage increases in excess of
 productivity growth result in rising prices,1
during the first halfyear following the low point in output productivity gains and increased hours tend to account for much of digitized for fraser httpfraserstlouisfedorg federal reserve bank of st louis 10the output growth,1
but productivity has continued to rise at about a 4 per cent rate in manufacturing even though the current expansion has continued for over three and onehalf years,1
second the slowing of aggregate demand globally has also depressed the prices of oil and other commodities,1
8in view of the huge expansion in production and employcid173ment that we have experienced during the past year it would have been difficult to avoid an appreciable upward movement of the price level even with a balanced federal budget,1
the strong demand for goods and services that we associate with prosperity causes wages to be raised not only in manufacturing where the increases can be offset in part at least by mechanization but in the service enterprises like stores hotels and hospitals where there is less chance for similar offsets,1
this may lower the rate of productivity growth for a time,1
some areas that had previously been relatively immune to national
 3
 
 economic recessions have this time experienced much sharper declines in business activity and
 rapid increases in unemployment,1
3
 
 
 the related growth in salaries in this higher wage sector should
 
 help bolster consumer spending,1
still others suggest that labcr demands for wage increases exceed gains in productivity or that the rise in prices stems from the impetus to public and private spending that is giilen by the enormous expansion of debt of all kinds,1
while uncertainty is a source of embarrassment to
 forecasters it has very real costs to us businesses and households by creating
 unnecessary inefficiencies and lowering our productivity growth,1
this is evidenced by the fact that despite cutbacks in spending on new it
 investments strong productivity growth has continued throughout the recent recession and thus far in the
 recovery,1
19
 
 new plant and equipment should increase at least 13 percent this year
 
 20
 
 despite the continuation of shortages of certain parts and materials,1
furthermore as i just discussed productivity growth has slowed,1
during the years of strong productivity gains workers and their families became accustomed to generous increases in their real incomes,1
when we have higher rates of productivity growth we have higher rates of gdp growth,1
the consumer too will intensify the ups and downs of the business cycle if he persists in flashing his new credit cards without discretion in times of prosperity only to lay them aside entirely when even a moderate recession sets ini have dealt with three major criticisms related to our growth rate  that unemployment is too high that public service outlays are too small and that business fluctuations are too large,1
i learned about the key role that
 community banks play in helping small businesses get started and flourish,1
this picture has not been improving because real  consumer spending has risen at only a 11 percent annual rate over the last six  months,1
similarly a stronger labor market can provide a modest countervailing factor to income inequality trends by leading to higher wages at the bottom rungs of the wage scale,1
since thendigitized for fraser httpfraserstlouisfedorg federal reserve bank of st louis6 boom based on a surge of spending first by consumers and then by producerso these waves of spending stimulated overcid173all economic activity and enlarged the productive capacity of the economy but the pace of expansion was too rapid and in the process pressures were generated that led to rising prices and living costs and to spreading inflationary senticid173mento hence the imbalances that led to the 1957 downturno as the recession deepened last winter and spring to many observers the outlook for an early return of prosperity appeared unfavorableo the decline in activity was greater than in either of the two previous recessions of the postcid173war periodo in the eight months after august 1957 induscid173trial production fell 13 per cento output of durable manucid173factures declined 20 per cento business outlays for capital goods dropped fast and reported plans for such outlays promcid173ised no pickup until well into 1959 or latero business inventories were large and strong efforts were being made to reduce themo unemployment had risen sharply and was concid173tinuing at a high levelo consumers were demonstrating a discid173tinct lack of enthusiasm for most of the products of the automobile industry and were paying off debt in significant amountso in spite of these seemingly unfavorable signs and to the surprise of most analysts the low point was passed in aprilo since then production has been rising at an uncid173usually rapid paceo from april to september the federal recid173serve index of industrial production rose 9 per cent thus regaining twothirds of the earlier declineo instead of a saucerlike low such as occurred in the preceding recession when production touched bottom in the spring of 1954 but recovery did not get under way until autumn this time the cyclical contour took the shape of av,1
reflecting the very rapid increases in hourly compensation and the absence of productivity gains unit labor costs have risen at an extremely rapid rate in the last year,1
this phase is characterized by a major acceleration in us productivity 
         growth and the decline in what economists call home bias the parochial 
         tendency to invest domestic savings in ones home country,1
 i will not debate that point i am addressing a convention  6of professional economists not moral philosophers or political scientistsanalyzing the issue as a matter of economic engineeringi believe that the experiences of the 1970s here and abroad have demonstrated the practical difficulties of sustaining growth and productivity on the shifting sands of a progressively weakening and uncertain currency,1
one of
 the st louis feds specialties for example
 is to develop new software applications
 for the us treasury which is increasing
 3
 
 federal reserve
 
 its use of electronic receipts and payments
 to reduce costs and improve services,1
business sentiment remains at high levels and our business contacts in manufacturing and services report increasing demand consistent with readings from national and regional business surveys,1
similarly the region had enjoyed the benefits of a sharp increase in production and employment in the oil and gas extraction sector as new technologies were brought to bear but the sharp drop in oil prices since mid2014 has resulted in a significant slowdown in natural gas and oil exploration in the marcellus and utica shale regions which include northern ohio and western pennsylvania,1
rather the effectiveness with which we have invested both domestic saving and funds attracted from abroad is the apparent source of our decadelong rise in productivity growth,1
recent slower economic growth is largely connected with less rapid consumer spending growth and a slowing in business capital spending,1
the combination of weak growth and strong hiring in this expansion implies small increases in output per hour or productivity,1
but this simple answer only begs another question w h y
 do some economies have high levels of capital and technology while others don
 t,1
krizan 2001 aggregate productivity growth lessons from microeconomic evidence in charles r hulten edwin r dean and michael j harper eds new developments in productivity analysis chicago university of chicago press,1
in real terms the level of consumer spending on goods is about 16 percent higher than it was before the pandemic while that on services is still about 5 percent below,1
until a few months ago aggregate demands both governrrental and private for scarce materials and labor pressed hard upon our resources and prices rose as a result,1
throughout this expansion business investment spending has grown much faster than weve seen in previous expansions,1
and as wage increases result in rising labor costs employers are likely to raise prices to maintain profit margins,1
over the last three years real consumer spending has increased at an annual rate of 225 percent,1
a large share of the rise in debt public and private was accid173counted for by residential mortgagesthis time 42 per cent of the 27 billion rise in total debt as against 29 per cent of the 45 billion rise in 1955 there was also superimposed on rising consumer spending an extraordinary expansion of plant and equipment,1
it may have failed to take into account the strong brakes upon inflationary price rises especially of manufactured articles that are provided by excess productive capacity and increased productive efficiencyif these economic forces are accompanied by realistic wage bargaining realistic pricing that will keep our firms competitive and the determination of our nation to turn away from deficit spending except in dire emergencies and to return to the paths of prudence inflation can and will be stoppeddigitized for fraser httpfraserstlouisfedorg federal reserve bank of st louismonetary misconceptions charles dickens opens a 1ill of q ci with some observations about the state of europe a century and a half ago 11it was the best of times it was the worst of times it was the age of wisdom it was the age of foolishness  it was the spring of hope it was the winter of despair,1
but globalization impacts the conduct of business so 
                           much more profoundly and therefore it impacts the expansion 
                           of our productive capacity and the pricing mechanism 
                           of labor and other inputs,1
the expansion of businesses loans tends to be sustained relatively more at the large banks with ready access to eurodollars during periods of monetary restraint than at other banks,1
in fact the workings of labor mar3
 
 monetary policy and inflation
 
 kets suggest at least two other mechanisms and
 so the presence of nominal wage rigidity were
 it to existmight not be a hindrance in a zeroinUFB02ation world,1
as we assess the need for further policy action well need to remain especially vigilant for signs of increasing wage and price pressures,1
laws that protect against the
 threat of expropriation or government repudiation of contractsall of the rules that
 cumulatively sum to the protection of property rightsare important,1
rising government expenditures especially for defense
 have fostered strong gains in both output and employment in related industries,1
in the meantime previous increases in labor costs and the recent than above a year ago low productivity rates averaging less 1 per centin the last few quarters have combined to produce sharply higher costs per unit of output in manufacturing,1
the increase in the money supply then increased domestic demand for goods and services and put upward pressure on domestic prices,1
consumer spending continues to grow both as cause and effect of improving economic conditions,1
  we all went out and increased our purchases of goods and services at a rapid rate resulting in unusually strong spending growth of around five percent,1
recent data have indicated that the expansion of aggregate demand has moderated to a pace closer to the
 enhanced rate of growth of the economys potential to produce,1
a key reason overall gdp was so weak last quarter was consumer spending which rose only 06 percent at an annual rate,1
for example real residential fixed investment declined by about 40 and 45 percent respectively in the periods surrounding the 197375
 and 198082 recessions1 by contrast real residential fixed investment has declined by about
 13 percent since its peak in the third quarter of
 2005
 let me now turn to current economic developments in more detail which will set the stage
 for the outlook portion of my talk,1
one of the reasons for this trend is continued pressure on business profits because of slower growth overseas higher labor costs and intense competition which makes it harder for firms to increase prices,1
part of the modest pace of investment is likely because the effective labor force that will use this new capital has been expanding much less rapidly than in previous decades but it is also possible that investment has been restrained by the subdued outlook for growth and profits thereby generating less demand for expanding productive capacity6 however the slow growth in capital per worker has been quantitatively less importantaccounting for only onefourth of the slowdown in productivity compared with its longrun averagethan the decline in the growth rate of total factor productivity tfp the portion of productivity that is not accounted for by measurable inputs to production,1
still longterm rates increased only
 
 slightly in 1977 despite the heavy volume of financing in the capital
 markets before rising noticeably in early 1978
 
 this leads to the key
 
 questioncan a strong business expansion continue in 1978 without sig
 nificant upward pressures on rates,1
  at that time the federal reserve noted that growing caution by lenders and unsettled conditions in financial markets are likely to restrain aggregate demand in the future,1
as an example in six asian countries including china and india exports fell more than 30 percent by the beginning of 2009 and industrial production declined about 10 percent,1
consumer spending has been rising solidly of late likely a reflection of the boost to purchasing power from the lower oil prices as well as the ongoing job gains and a wealthtoincome ratio that remains high even after the recent declines in the stock market,1
the price index for personal consumption expenditure increased 31 percent over the 12 months that ended in may and is up at a 39 percent annual rate for the last 3 months,1
monetary policy and business cycle fluctuations
 at times during the recovery the public discussion seemed to suggest that by setting interest rates appropriately monetary policymakers could offset the deep shock that afflicted the economy and speed up the recovery,1
we experienced an unsustainably rapid increase in business spending on plant equipment and inventory to the point where business fixed investment expenditures were accounting for nearly 11 per cent of our gross national product  a level that had never been reached in previous postwar business cycles,1
then in the last half of 2009 while gdp and manufacturing production were increasing we lost an additional 11 million jobs,1
therefore in may we took the next step in our ongoing effort to enhance protections for consumers who use credit cards by proposing rules under the federal trade commission act to prevent financial harm to consumers from specific practices,1
stockholders management government and labor in the u s must work together to overcome this with the idea that the gains will be equably distributed by the price and wage structurenow some may argue that american labor in striving for more percentage wage increases than productivity increases can yield is simply trying to get part of the increase from corporate profit,1
a proinvestment policy agenda by the government could help address some of our nations longterm challenges by promoting investment in human capital particularly for those who have seen their share of the economic pie shrink and by encouraging research and development and other capital investments that increase the productive capacity of the nation,1
our analysis is based on the expectation that
 global oil supply will grow at a slower rate and that daily demand will continue to grow on
 average at approximately 13 million barrels per day for the remainder of 2016 and at a similar
 rate in 2017
 this balancing process has been more painful and slower than some had anticipated,1
however much of the decline in import prices during this period was probably driven by movements in exchange rates and the effects of technological change on goods prices rather than by the growing integration of world markets7 in addition import prices have risen at about the same average pace as core consumer prices over the past several years and thus no longer appear to be acting as a significant restraint on inflation in the united states,1
and some of the factors that boosted the us trade
 deficit such as higher productivity growth or financial innovations that
 support greater spending may show up more fully in foreign economies,1
these data suggest that the increases in small business ownership and equity 
   investment by traditionally underserved populations result in part from 
   increased access to appropriate financing to fund the startup and growth 
   of businesses,1
for a vast nation such as ours at the cutting edge of technology a large pickup in productivity growth is difficult to envisage,1
first in the aftermath of the financial crisis there has been an unusually large and persistent shortfall in aggregate demand,1
this large decline likely reflects more than exchange rate appreciation alone but some drag on net exports from exchange rate appreciation is likely to persist,1
but without doubt it has played an important role in helping to boost aggregate demand in recent quarters,1
the employment and income generated by business spending on capital goods boosts consumer spending and sets off another round of investment spending,1
theres another possible factor that may not be temporarythat trend productivity growth has risen to a higher level as a result of strong investment in computers and other hightech equipment,1
conclusion a in conclusion its still too early to determine how long productivity will continue to increase at a higher rate,1
but faced with high fixed costs for labor plant and equipment it was less expensive to produce vehicles and sell them with heav y incentives than it was to shut down plants,1
one of the temporary factors is the strong dollar which has contributed to a fall in import prices,1
incoming data suggest reduced gains in consumer spending and unanticipated
 increases in inventories,1
then i consider how widespread these gains in productivity growth are around the world and speculate on reasons that productivity growth gains may be positive in some countries and not in others,1
capital formation particularly investment in information and communications technology played an instrumental role in the widely noted surge in productivity growth that took place in the late 1990s,1
regulations that protect intellectual property rights reward those with creative ideas and therefore can act to stimulate costreducing innovations,1
productivity growth accelerated significantly in the us during the boom years of the
 late 1990s,1
better jobs require more productive workers
 and pay higher wages,1
i say that accelerated labor productivity is arguably at the root of declining domestic valuedadded price inflation because it can be misleading to identify a single variable as the exogenous force in an essentially interactive process of cause and effect,1
i concluded then and continue to believe that the single most important factor explaining lagging job creation is the astonishing gains in labor productivity that have been achieved in the us economy in the past few years,1
it can be argued that the comparative absence of labor market rigidity in the united states results in comparatively large movements over time of workers between industries
 and sectors and across geography,1
many analysts now believe that the economys
 sustainable productivity growth rate is approximately 2 to 2½ percent,1
small business access to credit and bank
 supervision
 well as the old saying goes enough about me lets talk about you,1
real gross domestic product growth last year was a strong 4 percent or so but domestic spending growth was even stronger at about 5 percent,1
although we can expect productivity growth to remain strong
 throughout this decade growth in our workforce has started to slow
 a bit,1
i will then turn to the role of small businesses in our economy drawing on our research on small business finances and our efforts to promote small business access to capital and credit,1
as i mentioned earlier the core inflation rate has stayed relatively low in recent months as rapid gains in productivity have tended to offset cost increases,1
we already saw some indications of a shift down toward long run
 productivity growth at the end of last year,1
productivity growth in 2002 was an important factor contributing to an equally impressive growth in real disposable personal income of 43 percent,1
we realized some of each in the last half of the 1990s after productivity growth picked up,1
202  michael moskow speeches  1999  d its important to recognize that the labor market is more flexible and efficient than in the past,1
until market forces assisted by a vigilant federal reserve effect the necessary alignment of the growth of aggregate demand with the growth of potential aggregate supply the full benefits of innovative productivity acceleration are at risk of being undermined by financial and economic instability,1
the immediate
 
 effect of this greater spending is to encourage increased
 output and employment growth,1
real gross domestic product grew at an annual rate of nearly 4 percent in the first quarter building on an even larger increase in the second half of 2003 and it appears to have posted another sizable gain in the second quarter of this year,1
larry and most others i think felt that high productivity growth would resume once the slowdown is behind us,1
concerns about small business financing for minority and womenowned businesses have arisen because of the persistent differences observed in financing patterns by these groups as well as their underrepresentation in the business population,1
the employmenttopopulation ratio for primeage workers has also improved over the past year although it is still 2 percentage points lower than its precrisis peak in 2007 earlier this year many observers saw the prospect of fiscal stimulus as presenting the possibility of a substantial boost to domestic demand,1
before i begin i should note that i speak only for myself and not for my colleagues on the federal open market committee1
 when we spoke last year i spent a fair amount of time on the list of factors that appear to have contributed to the decadelong boom in housing and housing finance that preceded and appear to have precipitated this recession and the associated financial turmoil2 the list included historically strong growth in productivity which passed through to growth in real income and the demand for housing low longterm real interest rates technologically driven improvements in retail credit delivery which lowered borrowing spreads and expanded access to credit and a regulatory regime which may not have adequately contained the moral hazard associated with perceptions that many large financial institutions including especially the governmentsponsored housing finance intermediaries fannie mae and freddie mac were too big to fail,1
from 1995 to 2001 nonfarm labor productivity grew at an annual rate of
 nearly 25 percent more than a percentage point
 faster than the disappointing performance seen
 from 1973 to 1995 increases in business efficiency
 boosted expectations of the future growth of corporate earnings,1
this is a point i have also made in the past14 while there is disagreement about what the most effective policies would be some combination of more encouragement for private investment improved public infrastructure better education and more effective regulation is likely to promote faster growth of productivity and living standardsand also to reduce the probability that the economy and particularly the central bank will in the future have to contend with the effective lower bound,1
return to text
 3 since domestic saving less domestic investment is 
         equal with small adjustments to the current account balance the dispersion 
         of domestic saving less domestic investment among nations is a very close 
         approximation to the dispersion of current account deficits,1
finally when home mortgages made by depositories only is considered the path of lending lies within the range of outcomes for past business cycle downturns albeit toward the lower part of the envelope,1
the decline in estimates of potential growth has been driven largely by unexpectedly weak productivity growth,1
as you know the
 sharp decline in business investment spending was the number one contributor to this recession,1
such cost advantages
 
 
 
 
 5
 as w ell the area s favorable business climate have drawn businesses and people causing the
 southeastern economy to grow faster than that o f the nation in recent decades,1
this development in turn should have a positive
 effect on labor markets and personal income and thus help sustain consumer spending
 which has been the strength of this expansion in the past year or two,1
early in
 recoveries businesses tend to increase output by employing existing workforces more intensively,1
although overall gdp edged down at an average annual rate of only 02 percent in the first three quarters of 2001 the decline in business investment subtracted nearly 2 percentage points from gdp growth over that period,1
but the odds would seem to favor a more measured response to the inevitable tightening of policy as the recovery in business investment picks up steam consistent with keeping the economy on a sustainable growth track rather than becoming another source of macroeconomic instability,1
2  growth has been driven by unusually strong consumer spending and our expectations for growth in 1999 are even more positive than earlier this year,1
more generally the expected increase in demand for consumer durables is good news for
 the regions many car furniture and appliance factories,1
the pace of consumer spending after slowing some at the end of last year looks to have picked up in january and auto sales remained strong in february,1
along with these domestic
 risks global risks are also considered in my outlook given downward revisions in forecasts for gross domestic product growth in most major economies,1
will that happen again or will the current strong run of productivity growth sustain itself a good while longer,1
the higher
 
 prices in this forecast are due in large part to the lifting of oil prices from very low 1986
 levels but also to the rise in prices of other imports which as o f the end o f the third
 quarter were up 7 percent,1
higher social security taxes will also increase business costs
 besides cutting takehome pay,1
real disposable personal income peaked in september of 2007 and consumer spending growth then slowed dampened as well by the decline in household wealth due to falling house prices,1
weak foreign demand relative to the united states has pushed down net exports and contributed to a nearly 20 percent strengthening of the real tradeweighted dollar since mid2014,1
strong property rights a crucial element in financial development severely constrain a governments ability to expropriate land factories or ideas whenever it wants to profit from them,1
financial pressures on financial institutions and households have contributed in turn to greater caution in the extension of credit and to slower growth in consumer spending,1
assuming these firms are unable to fully pass through higher input costs into prices they will experience some compression in their profit margins at least in the short run thereby causing a decline in the marginal return on investment in most forms of equipment and structures7 moreover to the extent that higher oil prices are associated with greater uncertainty about the economic outlook businesses may decide to put off key investment decisions until that uncertainty subsides,1
with productivity
 somewhat weak unit labor costs will accelerate and at some point firms will have no choice
 but to start passing these price pressures onto consumers,1
why productivity matters
 the importance of productivity growth is
 easy to demonstrate,1
with the federal funds rate about as low as it can go significant further decreases in inflation as a result of the substantial slack in resources lower import prices and declines in the prices of oil and other commodities could imply an increase in the real federal funds rate,1
economic growth in other countries should increase demand for our exports,1
my forecast calls for about 3
 percent growth in 2014 this is in line with the central tendency of 28 to 32 percent
 growth reported by my colleagues on the fomc in december 2013
 there has been discussion of some recent weakness in consumer spending housing
 starts and housing sales,1
business investment in
 capital goods and plants should also post moderate gains as factories are expanded and
 equipment is upgraded to accommodate increased industrial production,1
growth in consumer
 spending slowed from its rapid pace of the late 1990s but consumer spending has not declined in any
 quarter of this cycle,1
the lower interest rates encourage  consumers to spend and firms to invest,1
offsetting influences on consumption should support continued growth of consumer spending,1
in addition the federal reserve and the treasury have jointly announced a facilityexpected to be operational shortlythat will lend against aaarated assetbacked securities collateralized by recently originated student loans auto loans credit card loans and loans guaranteed by the small business administration,1
i believe that no firm should be too big to fail and that a body other than the fed should
 have the authority to fail these firms wipe out shareholders stakes in the firm force
 uninsured creditors to take haircuts and unwind the firm in an orderly manner,1
in the small towns and hollers of eastern kentucky i visited with community development financial institutions that are trying to plug the gap in access to credit so that small businesses can continue operating and hiring locally and so that families can access housing that is safe and affordable,1
central banks regularly commit to maintain low inflation in the longer term if such a promise is viewed as credible by the public then it will tend to be selffulfilling as inflation expectations will be low and households and firms will temper their demands for higher wages and prices,1
the first
 consumer spending is expanding,1
consumer spending grew at a robust 54 percent in the first half
 of 1983 and we expect this growth to continue although at the slower
 rate of 35 percent over the last half of 1983 and 1984
 similarly
 
 the sur g e in i n v e n t o r y i n v e s t m e n t we have e x p e r i e n c e d
 
 recently will not continue to provide the same spur to the growth of
 output and employment in 1984 that it did this year,1
the natural disaster in japan has
 shaken financial markets and raised concerns about supply chain disruption,1
weak global demand has been driving energy and commodity prices lower this past year,1
that development in turn could make it more difficult during downturns for monetary policy to support spending and employment and keep inflation from falling too low4 another key development in recent decades is that inflation appears less responsive to resource slack,1
simplicity        there is significant justification for both higher levels and higher quality of capital,1
we also track estimates of the number of parttime workers who
 might convert to full time in a stronger job market,1
accordingly we cant count on the foreign sector to offset weak domestic demand for goods and services,1
the record shows that deeper and longer recessions can leave behind lasting damage to the productive capacity of the economy3 avoidable household and business insolvencies can weigh on growth for years to come,1
return to text 9 see ryan a decker john haltiwanger ron s jarmin and javier miranda 2016 declining business dynamism what we know and the way forward amercian economic review vol,1
so without
 robust consumer spending the economy will be sluggish,1
clearly there will be increased costs to businesses households and governments to achieve and maintain a heightened degree of security,1
the latest data suggest that consumer spending is robust and consumer confidence is high,1
the dollar monetary policy
 and the economic outlook
 
 
 
 
 remarks of
 john j balles president
 federal reserve bank of san francisco
 
 meeting with
 southern california
 community leaders
 
 laguna niguel california
 november 26 1985
 
 in t r o d u c t i o n
 last
 
 month
 
 marked
 
 the
 
 e n d of
 
 current business cycle expansion
 favorable developments to note
 
 the
 
 third
 
 year
 
 of
 
 the
 
 in many ways there are
 over these three years
 
 almost 9 million new jobs were created and the total volume
 of goods and services produced by the
 
 us
 
 measured by inflationadjusted or real
 
 economy as
 
 gnp
 
 increased to a
 
 level more than ten percent above its previous peak in 1981
 
 at the same time the unemployment rate was brought down
 from 107 percent to 71 percent,1
commercial real estate construction will remain weak as will capital spending
 by businesses and personal consumption of durable goods,1
im hopeful that productivity growth will improve but in the meantime its  worth exploring how we can draw workers off the sidelines,1
according to common wisdom the midwest benefitted quite a bit from the declining dollar which made its exports cheaper for overseas buyers,1
as i noted earlier i
 believe the economy has already met the criteria of substantial improvement in labor
 market conditions and the economic outlook has improved as well,1
there
 is general acceptance of the goals of stabilization policy which include
 high employment rising output and relatively stable prices,1
evidence of
 recent cessation in real product growth is provided by an
 apparent slight decrease in real gnp for the fourth quarter
 of last year and a six per cent annual rate of decrease in the
 industrial production index since mid1969,1
it is interesting to ask for example whether consumer credit con
 trols might have dampened the recent consumer spending boom,1
the slowdown in
 europe has resulted in some cooling of overall export growth and a slowing in us manufacturing,1
on one side were those who favored a centralized institution with a strong private sector orientation preferably located in new york,1
how long can advances in technology and computer technology in particular continue to support a higher productiv ity growth rate,1
in the 1980s japan and many european countries achieved larger increases in productiv ity than the us but since the mid1990s productiv ity growth in the us has surpassed that in japan and europe,1
it was unusually well maintained during last years downtur n and on average productiv ity has increased at a robust pace over the past three quarters,1
in conclusion a too early to determine that productivity will grow at a strong pace for the longer term,1
but some larger multinational firms have become more hesitant and several manufacturing contacts have said that the tariffs have been disruptive to their supply chains forcing them to find alternative suppliers or face increasing costs of production,1
capital spending has been growing in the doubledigit range for two
 years now,1
but to solidify the expansion final demand needs to gain a firmer footing,1
some of the negative effect of rising oil prices has been offset by solid productivity growth and accommodative monetary policy,1
despite these worries consumer spending has held up well it grew 36 percent in 2006 which is a robust pace by historical standards,1
the low savings rate and high debt to income ratios that
 resulted from very high consumer spending growth will dampen these expenditures as we
 go forward,1
in
 
 addition we are running up against problems of capacity constraints that i will discuss in
 a moment,1
in the interest of enhancing our global competitiveness
 
 and ensuring continued improvement in living standards for coming generations congress
 needs to take steps now to trim spending and if that cannot be done to raise more
 revenues,1
our industries are geared toward large manufacturing runs that
 supply products to nationwide retail outlets and distributors with numerous local
 accounts,1
the construction industry suffers from the lingering overhang from past
 overbuilding and hesitancy among many lenders to finance new projects,1
the outlook for net exports remains poor due mainly to the weak economic
 conditions of many of our largest trading partners,1
specifically the southeast should continue to
 get most of its gain from business services employment,1
ive spent my professional life helping firms make decisions about hiring compensation and prices and ive made a lot of those decisions myself,1
also ive been struck by the large number of accounts ive heard recently about firms having difficulty finding workers with the appropriate skills in many cases constraining production,1
in this recovery though real consumer spending has grown at a pace that is fairly modest and not strong enough to generate the rapid overall growth we have seen in other recoveries,1
the difficulties are intensified by the strains on the financial system caused first by a significant acceleration of inflation and then by the necessary financial and nonfinancial adjustments to disinflation rhich was not fully anticipated by the markets,2
during the last 20 years or so weve deregulated financial markets weve developed more flexible labor markets and weve made major advances in technology,2
ive emphasized consequences related to financial market  instability like inflated asset prices volatile asset returns and heightened  merger activity,2
we continue to urge banks to exercise prudent lending standards especially in regard to highly leveraged firms,2
to be sure the stock prices of oldline companies 
         do rise somewhat through arbitrage when the market as a whole is propelled 
         higher by stock prices of cuttingedge technologies,2
1          economists themselves have not always fully appreciated the importance of a healthy financial system for economic growth or the role of financial conditions in shortterm economic dynamics,2
a critical part of our work since the crisis to promote a stable financial system has therefore involved greater effort to ensure that large institutions are operating safely and soundly and are prepared to continue serving households and businesses even when faced with stressful financial conditions,2
the stakes are enormous actually nothing less than the preservation of a safe and sound financial system that can continue to operate in an orderly manner when the clock rolls over at midnight on new years eve and the millennium arrives on the scene,2
but deregulation of deposit rates has enabled cotrraercial banks and savings banks to recapture some of the market share lost to the money market funds  albeit at rising costs,2
what are the main lessons to be learned on the domestic monetary side of thingsfirst of all there is the clear lesson that more needs to be done in the area of restructuring our financial system so that public policies to combat inflation can work more effectively,2
the severe financial strains of the last few weeks bring to mind two very important issues relating to the federal reserve and to both your morning and afternoon sessions,2
while the economy had been expanding strongly through the summer no one could be certain about the effect of last octobers stock market crash,2
this raises the cost of regulated intermediation however and increases the demand for liquid depositlike investment vehicles that avoid regulation,2
         in the aftermath of the financial crisis ongoing increases in capital buffers reductions in funding vulnerabilities improvements in risk management and attention to orderly resolution are producing a substantially more resilient financial system,2
there had been some fear at the time of the stock market collapse that the drop in household wealth would lead to a significant retrenchment in consumer spending,2
if the public is adversely affected how can we change the rules consistent with safe and sound banking and financial market stability,2
public policymakers charged with ensuring a safe and sound banking system should therefore exercise restraint and resist calls for premature regulation,2
if we look at another monetary variableinterest ratesrising rates may stem from either a restrictive monetary policy or increased demands for credit,2
the recognition that excessive risktaking threatens the safety net and that access to the safety net can give banks a competitive advantage over nonbank rivals led to the enactment over time of regulator restrictions on bank activities including prohibitions on some powers that banks now desire to meet changed circumstancesthe federal reserve board recognizes the importance of attaining relief from regulations adopted in an environment drastically different from that of today,2
this of course is the problem of moral hazard associated with toobigtofail perceptions whereby investors or counterparties are willing to extend credit at prices that do not fully reflect the risk associated with the bank2           the market discipline traditionally associated with the market for corporate control is also affected by banking regulation and supervision,2
during the financial crisis we used our safety and soundness authority to require banks to hold sufficient capital to weather the impact of the crisis and the serious recession that followed,2
some emerging market economies do not have the infrastructure to support a fully convertible internationally traded currency and to allow unrestricted capital flows,2
the resolution of the military conflict in
 iraq is now showing through to favorable financial market conditions around the world,2
reducing the extent of thrift restructuring would likewise reduce the pressures for a parallel restructuring of the banking industryeconomies of scale in commercial bankingover time the existence of economies of scale in commercial banking has probably been the most frequently cited cause of a coming restructuring of the banking industry,2
introductory remarks by thomas c melzer
 for session ii new instruments  new risks
 innovation  structural change in financial markets
 a conference sponsored by the federal reserve bank of new york
 may 46 1986
 the subject of our second session is new instruments  new
 risks,2
litigation involving interstate nonbank operations is ongoingwould the general introduction of interstate banking produce a really major restructuring of the banking system,2
and as we expand bank powers we inevitably add new elements of risk risk which must be matched against adequate levels of capital,2
the only thing that would change is the division of the total credit demand amongst the suppliersthe introduction of now accounts and share draft accounts increased the number of competitors in the provision of third party payment services but that added competition has not been blamed for any financial institutions failure,2
the prophets of small bank doom although receiving considerable press attention have provided no evidence to support their position,2
and second some shocks to the financial system are so substantial especially when they weaken a large number of intermediaries that decreases in aggregate demand can be large long lasting and not quickly or easily remedied by conventional monetary policy,2
in addition the banking powers of the thrift institutions have been expanded by the garn st germain act and by the laws of states such as california and florida,2
the depository institutions deregulation and monetary control act of 1980 federal reserve bulletin vol,2
the banks under 25 million of assets had a higher return on assets 156 than the banks with assets over 250 million 108,2
we cannot forever rely upon consumers even though their confidence is at a fiveyear highthus the question in the minds of many forecasters today is whether this cyclical recoveryexpansion will abort from increasing interest rates and the collision of federal megadeficit spending with rising private credit demands,2
as an exairple in 1978 congress lowered the capital gains rates thus stimulating venture capital expansion that bodes well for continued investment in new innovations and technologiesin addition as evidenced in the deregulation of the financial industry there are other changes to our business structure that have been encouraged by increased competition and innovation and that hold the promise of increasing efficiency and productivity of course in the case of the deregulation of the financial industry seme of these changes have had the immediate impact of complicating the process of monetary policy and in the broader sense the implementation for public policy in the recovery period,2
although i am a
 firm believer in deregulation in financial services i believe that this barrier is one that
 needs to be kept in good repair in view of the critical role of finance in the functioning
 o f any economy and the special safety net that has been constructed over the years for
 various segments o f the financial services industry because of this key economic role,2
the most serious problem is the increased risk of the residual loan portfolio the portfolio that has been effectively stripped of its high quality assets for which regulatory capital exceeds economic capital,2
perhaps under basel ii bankers and regulators will build the true relationship of trust and
 understanding that did not emerge under basel i
 as a central bank responsible for the financial integrity of the financial system the federal reserve sees the
 development of adequate risk management systems as an important part of its balanced approach to bank
 supervision,2
but the depth of the depression in germany exceeded that even of the united states and the failure in 1931 of a large austrian bank credit anstalt was an important trigger of a wave of bank failures that affected many countries including the united states,2
to give this assurance to banks the federal reserve has made clear that it will provide shortterm credit to sound financial institutions as needed,2
in practice the difficulty has been that in the united states deregulation financial innovation and other factors have led to recurrent instability in the relationships between various monetary aggregates and other nominal variables,2
well the history of loan losses as well asset quality problems suggest that ci loans are risky assets,2
accordingly we are now seriously considering making some targeted adjustments to our existing regulatory capital rules and looking for ways to enhance their risk sensitivity without increasing regulatory burden,2
lets look at some of
 
 first central banks throughout the world share a
 
 common concern for systemic risk in financial markets,2
we also want bankers to actively manage concentrations of credit risk and be mindful that strong lending activity can strain liquidity,2
the special marginal reserve requirement on increases in managed liabilities of larger banks was decided upon in view of the fact that those sources of funds have financed much of the recent buildup in bank creditthe experience of recent weeks has been hopeful but the new technique for conducting open market operations will not be a panaceaover the longer run the principal effect will occur through the impact of the new procedures on inflation,2
for example tier 1 common equity capital ratios at the largest us banks have nearly doubled since 20079 in addition new requirements address the specific interactions that banks have with ccps and derivatives markets in order to promote both the use of central clearing and strong ccp risk management,2
philosophically i think we would very much like to deregulate the depository institutions but the fact of the matter is the thrift industry cant stand it at this point in time,2
moreover it is difficult for supervisors and examiners to monitor and assess the interestrate risk exposure of a financial institution,2
but the record of the past 30 years does indicate that banks have done quite w0ll in a world of rapid financial innovation increasing competition and advancing technology,2
similarly the rise in stock prices which reduces corporate contributions to pension funds is also augmenting reported profits,2
the role o f the federal reserve in the
 
 e x p e c te i
 t h u rsd a y
 
 payments mechanism  statement o f e
 gerald corrigan president federal reserve
 
 
 
 
 statement of
 e gerald corrigan president
 federal reserve bank of minneapolis
 minneapolis minnesota
 before the
 subcommittee on domestic monetary policy
 of the committee on banking finance and urban affairs
 and the
 subcommittee on commerce consumer and monetary affairs
 of the committee on government operations
 us house of representatives
 june 16 1983
 
 mr chairmen i greatly appreciate the opportunity to appear
 before these subcommittees to review developments with regard to the pricing
 of services by the federal reserve under the monetary control act mca of
 1980 and to comment on some larger issues regarding the role of the federal
 reserve in the payments mechanism,2
the major objectives of basel ii include creating a better link between minimum regulatory capital and risk enhancing market discipline supporting a level playing field in an increasingly integrated global financial system establishing and maintaining a minimum capital cushion sufficient to foster financial stability in periods of adversity and uncertainty and grounding risk measurement and management in actual data and formal quantitative techniques,2
thats not to say that we prevent commercial banks from failingwe do not provide institutions with capital and if the corrective actions are unsuccessful the bank could fail,2
the unusual severity of the recession and ongoing strains in financial markets made the challenges facing monetary policymakers all the greater,2
beyond the regional interstate compacts interstate expansion is currently limited to acquisitions of failing banks by strong outofstate banks,2
the fomc knew that tools were available to choke off the stock market boom but those tools would only have been effective if they undermined market participants confidence in future stability,2
redesigning financial system regulation speech given at the new
 york university conference on restoring financial stability how to repair a failed
 system new york march 6 2009
 plosser charles,2
the recent enactment of the grammleachbliley glb financial modernization act of 1999 is one of the
 most important steps in this history but it is best understood as part of this historical continuum of regulatory
 change south of your border,2
but it will not continue unless each of these
 
 men contributes fully to sound banking practices and supports constructive
 management,2
but when holding companies borrow to help finance their acquisition of bank stock the question of double leverage and the degree to which it should be permitted arises,2
this is in contrast to the situation prevailing in other countries where nationwide banking has increased the safety and soundness of the financial structure through diversification,2
it would also promulgate all regulations excluding those dealing with monetary policy which are now required or authorized to be issued by any of the three supervisory agencies and it would otherwise administer and interpret the federal banking lawsthe new commission has been pictured as being almost exclusively concerned with quasijudicial functions calling for a high degree of knowledge of the banking industry as well as the ability to analyze both facts and law,2
by reducing the cost of substitution among the various investment instruments the trend toward securitization may well have contributed to increased volatility of financial markets,2
presumably one o f the
 
 primary motivations for integrating financial markets here is to keep pace with the
 exchange of goods in the common market,2
laws were enacted to separate commercial banking from investment banking,2
i also expect that real financial reform legislation will pass and banks insurance companies and securities firms will be allowed to affiliate to provide integrated financial services to individuals and businesses at less cost,2
for the most part consolidation and integration of the banking system have been driven by similar economic motivations and the policy responses are based on the same principles,2
commercial banks had become a major factor in home finance and the uneconomically low rates on mortgages made the thrifts with most of their eggs in one basket especially vulnerable to deregulation of deposit interest rates,2
a few examples insured depositors have not lost their funds in spite of mme than 100 commercial bank failures a year in recent times,2
this issue will inevitably emerge as part of the debate over further expansion of bank powers,2
however it is important that lending practices do not raise the risk profile of banking organizations or weaken the financial system,2
4as we move to reconstitute or assimilate the troubled institutions in the thrift industry and rehabilitate the great texas banking companies and as banks absorb additional provisions to bring third world debt reserves to more realistic levels and recognize mounting losses in commercial real estate the demands of banking on the capital markets will be huge,2
a stunning example is campeau where cash flows apparently failed to materialize as projected and a seemingly perfect deal ended in the bankruptcy court with unsettling effects on financial markets,2
functional regulation of nonbanking activities would assure expert oversight for each activity and the integrated marketing of related financial services provided by multiple entities would significantly enhance competitiveness,2
by the mid1990s we will have de facto nationwide interstate banking without the de jure blessing of congress or repeal of the mcfadden act,2
consider for a moment some of the nightmare problems the manager of a bank holding company faces with banks in ten different states,2
according to data collected under the home mortgage disclosure act hmda mortgage originations for secondhome purchases rose from 7 percent of total purchase originations in 2000 to twice that at the end of last year,2
these burdens are the result of wellintended legislation drafted without a full appreciation of the cost to banks of additional reporting and complianceit is also fairly obvious to me that the american ethic of shortterm profits and matching shortterm strategies puts american banks and financial institutions at a great disadvantage,2
foreign competitors at least take a longer view which is condoned and rewarded by their capital marketsforgoing shortterm profits to gain market share by bidding deals at skinny profit margins is considered smart in many countriesin the united states such behavior is punished with lower stock prices and higher interest costs for borrowed capitalwell i wont bore you with further description of a situation of which you are all too well aware,2
the  willingness of most members in congress to deal with glass steagall reform was clearly demonstrated by the overwhelming senate vote for senator proxmires bill in 1988 in my opinion that legislation would have passed the house in similar fashion if it had reached the floor,2
deposit insurance originally designed to avoid financial panics and runs on solvent banks has worked too well,2
recognizing the increased ability of thrifts to compete with commercial banks as well as the need of all institutions to compete with the rates available on market instruments there has been a narrowing over time in the differential between the rate ceilings on deposits among the various types of institutions,2
an argument frequently used against spreading the net any wider that is to say granting additional powers to federally  insured banks is that the safety net provides a subsidy to banks,2
thus we were able to conduct this analysis purely internally without putting additional burdens on banks during an alreadydifficult time,2
this would include thorough asset quality examinations at least once a year and more often in the case of banks with problems second higher capital requirements for banks which want to expand rapidly enter new businesses ge novo or pursue aggressive acquisition programs,2
the boards testimony presented at a senate hearing in may supported full disclosure of credit terms and indicated that the burden on financial institutions for disclosure requirements as to solicitations by mail would not be substantialwe did note however that the need for increased disclosures is by no means certain and further that requiring the inclusion of disclosures on all applications  not just mail solicitations  could be both burdensome and costly to a degree that would exceed consumer benefits,2
louis8staied stocked ancl equipped ard lia3 the necessary working capital for efficient operation has a far hotter earzing potential and hence is a better credit risk than one in thich joo much of the available resources are tied up iu land or plant l1iih che restl ti1at operations ae handicid173capped thtough lacd of eqnipment or reso111cps to take advantage of fortucid173itous opportmities that may arise,2
the period of relative legal and industry stability that followed the new deal legislation thus gave way in the 1970s to a nearly 30year period during which many prevailing restrictions on banks were relaxed both through administrative action by the bank regulatory agencies and through a series of legislative changes culminating in the grammleachbliley act of 1999 by the turn of the century the depressionera cluster of restrictions on commercial banks had been replaced by a regulatory environment in which they could operate nationally conduct a much broader range of activities and affiliate with virtually any kind of financial firm,2
later in my remarks i will also
 touch on the foreign bank supervision enhancement act fbsea which i am sure weighs on
 the minds of many here,2
financial markets have improved some since last fall though they remain disrupted and fragile,2
legislative proposals to remove the grammleachbliley constraints placed on the federal reserves ability to obtain information from and address unsafe and unsound practices in the subsidiaries of bank holding companies would make this supervisory reorientation more effective,2
because of perceived weakness in the banking system scandals involving bcci and salomon brothers and intense lobbying by various special interest groups congress focused on refinancing the bank insurance fund and tightening regulatory restraints,2
an increase in the business that banks do with highly leveraged investors like some hedge funds leads to an increase in the attention that banks must pay to counterparty risk management,2
over the course of this year commercial banks have tightened their lending standards and quality spreads have increased in the bond marketespecially in the highyield sector,2
it is now 214 per cent as compared with the 312 per cent rate set last summer after commercid173cial banks responding to strong loan demands had moved their prime rate up to 4 l2 per cent,2
if we look at some major pieces of banking legislation
 such
 as the expedited funds availability act and the federal deposit insurance corporation
 improvement act fdicia can see that these laws are so detailed as to leave very little
 we
 flexibility for either regulators or banks,2
that statement was originally issued in 1980 to facilitate the transfer of ownership of small communitybased banks in a safe and sound manner,2
unfortunately some managers might use fewer credit derivatives to reduce credit risk due to this potential earnings volatility,2
the regulatory burden on banks is not the only element of social cost but it is an important component,2
it is charged with ensuring the integrity of the payments system and
 it is a participant in its evolution,2
we also monitor the state of the financial industry as a whole and work with other federal and state financial authorities to help maintain stability in the financial sector,2
more recently the pricing of loansnot just the availability of loanshas been a potential source of discriminatory lending practices,2
in the rest of my remarks i will elaborate on these points though not in the spirit of a debaters arguments but in an effort to answer the question i posed a moment ago how that is can we successfully reduce the risks to financial stability posed by large internationally active banks,2
solving the immediate problem of weak asset quality and improving the industryU0092s overall profitability was of course the first priority and fortunately that was accomplished sooner than anyone expected,2
it has given banks greater flexibility in managing balancesheet items against riskbased capital standards while at the same time increasing fee income by continuing to service the collection of interest and principal for the investor,2
in a break with tradition we had to provide that liquidity to nonbank financial institutions as well as to banks,2
many thrift institutions which used to be geographically constrained to single states like banks are expanding interstate by the acquisition of financially distressed thrift institutions,2
such charges would be designed to reduce the burden on banks of membershipin the federal reserve systemif this move toward explicit pricing does eventuate the banking industry in general must be aware of what it costs to offer specific services to the public,2
but it was against the backdrop of the need for massive taxpayerbacked assistanceto firms and to markets more generallythat congress and financial regulators developed responses to the woefully inadequate capital levels of prudentially regulated firms the systemic consequences of stress at previously nonprudentially regulated firms such as the freestanding investment banks the widespread failures of risk management within these firms the parallel failures in supervision of these firms and the fragility of a financial system that had become characterized by large amounts of runnable shortterm funding,2
framework for expanded powers ofbank holding companiesremarks by emmett j rice memberboard of governors of the federal reserve systembefore the pacific northwest bankers associationseattle washington october 30 1986digitized for fraser httpfraserstlouisfedorg federal reserve bank of st louisframework for expanded powers of bank holding companies remarks by emmett j rice member board of governors of the federal reserve system before the pacific northwest bankers association seattle washington october 30 1986  it is a pleasure to be with you this evening,2
though inflation is hardly a rare economic malady doing something about it still involves overcoming complex and intractible political obstacles and avoiding excessive strains on financial institutions and creditwlnerable sectors of the economy,2
the supervisory organizations have agreed that basel i with its broadbrush system for setting the risk weights on various classes of bank assets is increasingly inadequate for measuring risk and the appropriate level of capital for such firms,2
the fdic
 may consider systemic concerns in a failing banks resolution and has the authority to act as a
 receiver for a failed commercial bank and run a bridge bank for up to five years,2
and our financial markets now react to japanese and gennan 110netary and fiscal policy decisions as well as to such policy decisions tn the us  these changes and the associated worldwide integration of capital markets has effectively encouraged significantly more competition from various foreign banks and financial institutions,2
interstate bunking in their view would favor large institutions at the expense of smaller
 ones and lead ultimately to a potentially dangerous concentration of financial power and
 to the demise of many valuable community banks,2
because shortterm interest rates were rising the previous ceiling on these deposits of 412 per cent established in november 1964 had placed banks at a competitive disadvantage with rates on other forms of financial assets and if left unchanged could have resulted in distortions in the flow of funds at a time of seasonally strong credit demands,2
similarly credit evaluations tend to be more costly for lowerincome borrowers who are relatively more likely to have short or irregular credit histories5 informational barriers to lending were heightened by the absence of uniform national depositories of information on the credit experiences of consumers at the time the creditreporting system consisted of hundreds of local credit bureaus each of which maintained limited information on local residents6 the high costs of gathering information together with the difficulty of keeping information proprietary may have created a firstmover problem in which each financial institution has an incentive to let one of its competitors be the first to enter an underserved market,2
a third important issue has been raised
 by the greatly increased foreign operations
 of us banks seen in the rise of their
 foreign branch assets from 5 billion in
 1962 to 80 billion in 1973 as chairman
 burns has noted overseas expansion has
 been a major component of the upsurge
 in assets that has called for commensurate
 increases in bank capital,2
although rooted in the declining profitability of farm production and
 land speculation the accumulated burden of farm debt could pose some
 threat to the functioning of the banking system,2
only last october chairman burns noted that in recent times american banking has gone through a profound evolution that has multiplied bankings exposure to the dangers inherent in excessive leveraging reliance on volatile deposits heavy loan commitments relative to resources rapid expansion of bank holding companies into diversified holdings and increased foreign exchange risks,2
michael moskow speeches  1999  39  o as a result the federal open market committee took action last fall to cushion prospective us economic growth from the effects of increasing weakness overseas and unsettled financial markets at home,2
moreover i am also convinced that a drastic increase in bank credit geared to exports would produce little in the way of additional export shipments while adding greatly to capital outflow,2
crosscurrents from policy uncertainty have risen since early may crimping business investment plans raising concerns in some financial market segments and weighing on global growth prospects,2
in a banking system with well over 14 000 banks it should be expected
 that s o m e institutions would b e c o m e overextended and experience larger than
 average loan losses,2
as many of you are aware the federal banking agencies through the interagency country risk exposure review committee icerc are developing an improved guide for examiners in evaluating the countryrisk exposure in banks,2
firstquarter data showed that aggregate capital ratios increased and banks continued to maintain ample levels of liquidity,2
most of the expansion in bank credit during recessions
 and early recoveries has taken the form of net acquisitions of
 securities,2
eere the monetary influence is traced directly in the flow of bank credit to consumers government and businesses and indirectly in the impact of bank credit expansion on interest rates and other borrowing terms,2
the ensuing wider intereptrate fluctuations would then have had the effects i have already sketched  stronger and quicker impact on the real sector wider exchange rate fluctuations probably sce damage to the financial systemthe experieoee of this year supports the view that the causal relationsuip of monetarypolicy action runs from the money supply to interest rates to the economy,2
in the early phase of the present recovery the slow growth of bank loans to business might have signaled to some that monetary policy was too restrictive while to others it seemed a signal of high business liquidity and ample availability of funds from internal sourcesdigitized for fraser httpfraserstlouisfedorg federal reserve bank of st louis another problem in policymaking is that many of the economic facts needed for policy formation are frequently unavailable or become available so late as to be of little use in current policy formation,2
of course when property values rise and the loan business grows increasingly competitive bank supervisors tend to worry that moreaggressive underwriting may set the stage for future deterioration in credit quality,2
the implications for financial stability from the recent market turmoilthe changing business of the largest commercial banks means that threats to financial stability do not necessarily come from traditional sources such as a deposit run or a deterioration in a banks portfolio of business loans,2
individuals decide to channel their new flows of savings into higher yielding market securities,2
and this is particularly true for highly concentrated agricultural banks where maintaining enhanced agricultural credit riskmanagement practices to facilitate prudent underwriting early detection of problems and wellthoughtout restructuring plans for agricultural borrowers are imperative to limiting losses and maintaining a sound banking institution,2
nevertheless though the effects of these excesses are likely to continue for much of this year in the form of moderately deteriorating asset quality and earnings at some of the larger banks these problems one hopes will prove modest both by historical standards and relative to the resources of these institutions,2
it has affected the ability of banks to attract and retain deposits it has complicated the
 making and collecting of loans and it has had an adverse effect on bank profits,2
can
 occur only if the federal reserve supplies additional reserves to the banking system either
 through its open market operations or through a reduction in reserve requirements,2
by the late 1990s outlays declined to under 19 percent of gdp primarily as a result of significant reductions in defense spending relative to gdp while revenues boosted especially by a strong economy and a strong stock market rose to a high of nearly 21 percent of gdp thus yielding surpluses,2
this connection between economic
 health and the banking system as you know is what persuaded congress to assign
 to the federal reserve an important role in supervising the safety and
 soundness of banking organizations as well as the responsibility for the
 discount window,2
through stress testing and other improvements to supervision the federal reserve is requiring more of large institutions,2
third attention should be given to improvement in the mechanism for assuring a sound payments system and appropriate financial liquidity,2
so while some policies that carefully target truly abusive practices are warranted the broader risk is of a regulatory overreaction that stifles much of the benefit of the technologydriven expansion in consumer credit,2
the reduced credit demands from balancing the budget are significant,2
free
 and open trade for instance depends on a strong banking systemnot only in the
 united states but also in each of our trading partners,2
either way they imply for the government a huge potential liability in the event of widespread bank failure,2
because the ability of the here
 tofore specialized thrift institutions to com 
 pete against banks would likely be increased
 if their lending and fundraising powers were
 broadened and m ade m ore com parable to
 those of com m ercial banks but if their tax
 burdens reserve requirem ents and regulatory
 structure were not,2
a predominance of private monies may introduce consumer protection and financial stability risks because of their potential volatility and the risk of runlike behavior,2
in so doing they can lean against vulnerabilities in the financial system that encourage the growth of excess credit,2
the incremental changes i am considering to increase transparency accountability and fairness would make supervision more efficient and effective and our financial system stronger and more stable,2
these changes include the consolidation and increased geographic scope of the banking industry a blurring of the distinctions between various financial institutions deregulation and the implementation of financial strategies made possible by improvements in computer technology and advances in finance theory,2
so far as i am aware the experience and performance of banks in these conglomerates has not been intensively studied from the standpoint of implication of such linkages for public policy objectivesfrom the beginning the boards position has been that the prohibitions in the bank holding company act against bank holding companies engaging in nonbanking activities should apply to onebank holding companies,2
as it turned out banks were in pretty good shape and weathered the spring of 2020 pretty well after a decade of effort by them and by government to strengthen regulation and supervision4 on the other hand probably the last thing that we expected to see was severe stress in the treasury market the most liquid and stable financial market in the world,2
excessive asset price inflation raises concerns about financial stability,2
the interagency guidance stressed the importance of continuing to make prudent loans to creditworthy customers1 clarified standards for commercial real estate cre loans and workouts2 and most recently restated supervisory views on lending to small businesses3           at the federal reserve we have complemented the guidance with training programs for examiners and outreach to the banking industry that underscores the importance of sound lending practices,2
three states iowa nebraska and wisconsin have followed
 federal legislation has been introduced but it seems obvious
 
 that the vitality of our state banking system will be better safeguarded by
 corrective legislation at the state level,2
they have faced weak sales diminished asset values elevated uncertainty and tight credit market conditions,2
while total bank credit expanded at an annual rate of about 9 per cent during the first eight months of 1966 business loans rose at an annual rate of 20 per cent in the same period,2
since the recession low stock prices have risen persistently while bond prices have fallen to levels comparable to those at the crest of the last cycle,2
bank credit measured by loans and investments of commercial banks expanded by 12 per cent,2
mortgage debt consumer debt and business borrowing all rose rapidly as did borrowing by state and local governments superimposed on these heavy credit demands was record borrowing for peacetime by the federal government after the 1958 recession was over,2
what has happened to loan quality in the rush to put additional amounts of higher yielding assets on the books,2
banks have been under growing competitive pressure not only from other banking institutions but from thrift institutions insurance companies diversified financial corporations of various kinds and from nonfinancial firms that extend consumer credit,2
the financial outlook is for a gradual
 increase in the credit demands of the
 private sector,2
the federal reserve as the supervisor of state member banks and bank and financial holding companies has been working with other regulators and financial institutions to improve the effectiveness and relevance of regulation and supervision in this changing environment,2
market participants also establish credit limits for their counterparties and actively monitor their exposures to ensure that they remain within the limits established,2
moreover a strong capital base significantly reduces the moral hazard risks associated with the extension of the federal safety net,2
if we persist in
 bailing out all creditors thougheven those of the holding company then none of the
 proposals for increased market discipline has much chance of success,2
for example deregulation has allowed banks to expand their geographic reach facilitating the formation of a number of large geographically diversified banking organizations,2
in addition the federal reserve contributes to the development of policies regarding banking supervision and regulation collaborating with the other agencies to issue rules and guidance that help ensure that federally supervised banking entities are adhering to the high prudential standards that are essential to maintain a stable banking system,2
operating subsidiary failures will continue to be treated either under bankruptcy or where applicable under specialized resolution schemes including the federal deposit insurance act for banks and the securities investor protection act for securities firms,2
these large business demands for external funds were reflected in both capital market financing and loan expansion at commercial banks,2
life insurance
 
 companies for example had 4 per cent more assets in october 1960 than in
 december 1959
 
 although the total of bank deposits and currency seasonally
 
 adjusted in the nation is below that of a year ago it has been rising
 recently and bank credit has increased,2
individual borrowers it is true have been
 finding funds increasingly more difficult and more costly to obtain
 as demands for credit have been rising even more rapidly than the
 
 
 
 
 10increasing supplies,2
the federal reserve for its part raised reserve requirements on time deposits to add a marginal cost and reserve restraint on bank issuance of cds and amended regulation q several times to hold down permissible rates payable by commercialdigitized for fraser httpfraserstlouisfedorg federal reserve bank of st louis7 the consequences ho1ever uere sherp shrinkages in new savings inflous to these institutions and resultini drastic cutbacks in new lending to their chief customer the housing market,2
in 1959 for example when high yields on marketable securities were also cutting heavily into the share of total savings going to depositarycid173type institutions commercial banks had less interest rate leeway to compete and the lions share of the shrinkage in flows occurred at banks,2
restrictive monetary policies prevailed only
 
 during the last three quarters of 1966 and a few weeks in early 1967
 in response to recent economic developments the federal
 
 reserve has raised the discount rate and increased reserve require
 ments pointing to less expansive monetary policies,2
these provisions collectively often called the bank safety net were designed to minimize the potential for asset or other problems in the banking system to disrupt the real economy but as an unavoidable byproduct also provide an important subsidy to banks,2
16 in closing i realize that i have offered nothing new or unusual in the way of suggestions as to how banks can meet the credit needs of modern agriculture,2
as usual my remarks reflect only my own views and are not intended to reflect those of the federal open market committee fomc or of anyone else associated with the federal reserve system2  supporting market liquidity as i pointed out in a speech last october one of the fundamental reasons that the federal reserve was established in 1913 was to ensure the provision of ample liquidity during financial market disruptions mishkin 2007a,2
the sharp rise in stock market activity which has also brought noticeable processing delays could have added further to the demand for cash balances,2
in light of early experience with this innovative statutory regime the board in 1984 mandated that each reserve bank appoint a community affairs officer to help financial institutions understand the laws requirements,2
more
 
 6
 
 the banker am the county agent
 
 this increased cooperation between banks in meeting the needs of the
 farmer is becoming more evident every day,2
digitized for fraser httpfraserstlouisfedorg federal reserve bank of st louis2by the end of september had reduced their foreign claims by over 700 million below the amount outcid173standing at the end of last december or by 300 million more than had been requested for all of 1968 during the last 312 years there has been a noticeable shift of bank funds to the developing countries which has been matched almost entirely by a decline of bank lending in continental western europe,2
something like this
 probably occurred in 1971 for the first half of the year
 real economic activity and price anticipations constituted
 sufficiently strong demand for credit to offset the rapidly
 expanding money supply and thereby foster rising
 interest rates,2
in these circumstances rising credit demand is naturally reflected in an increase in corporate borrowing costs and that has indeed been our recent experience especially in longerdated issues,2
cybersecurity is an important part of financial stability
 it would be difficult to determine the level of safety and soundness of an individual bank or of the financial system overall without paying attention to the risks to cybersecurity,2
even where direct losses to other banks were thought manageable the failure of a large bank might strike panic into depositors especially uninsured depositors of other large institutions,2
together with reform of our financial system for the more efficient marshalling of credit we must in parallel adopt measures to avoid waste of human talent and energy unemployment and to avoid the waste of scarce capital by making a scapegoat of any economic sector such as housing and the mortgage market,2
community banks and regulatory reform        as you know a key challenge for community banks in the years ahead will be to adapt to the changing regulatory environment particularly the regulatory reforms contained in the doddfrank act as well as the changes that will be associated with the basel iii reforms,2
financial sector weaknesses rigid exchange rate regimes and volatile capital flows combined to yield a highly combustible mixture that with the spark of adverse external shocks ignited currency and debt crises including the collapse of banking systems throughout the region
    
 the asian crisis experience highlights the crucial importance of robust institutions and sound policies in mitigating the risks emanating from external financial shocks,2
for release on delivery1030 am mdt 1230 pm edt friday june 6 1975two key factors in the regulation of bank holding companiesremarks ofjeffrey m bucher member board of governors federal reserve systemtocolorado bankers association annual convention colorado springs coloradojune 6 1975digitized for fraser httpfraserstlouisfedorg federal reserve bank of st louisfor release on delivery 1030 am mdt 1230 pm edt friday june 6 1975 two key factors in the regulation of bank holding companies remarks of jeffrey m bucher member board of governors federal reserve system to colorado bankers association annual convention colorado springs colorado june 6 1975  two key factors in the regulation of bank holding companiessince that new years eve in 1970 when the highly restrictive bank holding company act of 1956 was liberalized by the president signing the bank holding company act amendments of 1970 the federal reserve board has had the task of presiding over the transformation in form and function of the american banking systema member of the federal reserve board can lake the view that this has been a great and exciting challenge or that it has been a new workload of almost crushing size,2
banks and thrift institutions that hold mortgages are wellcapitalized and exposures of individual banks to possible subprime losses do not appear to be large,2
although it has taken time globalization is helping to generate the demand for an improved financial system which is driving the reform process,2
to the extent that these measures improve market functioning they will have favorable effects on the availability of credit to the broader economy,2
as is well known bond prices have risen substantially rather than tending downward as had been widely anticipated last fall and stock prices have fallen dramatically,2
but
 
 the upsurge in inflation has also gone hand in hand with the excessive money
 growth of past years when monetary policy was pushed off course by the ex
 cessive credit demands generated primarily by federal deficit financing,2
in his july 2019 testimony to the house financial services committee fed chair powell highlighted our concerns about libra particularly around consumer privacy and protection the risks of money laundering and the need to assess its impact on broader financial stability7 with this increase in unfavorable regulatory and congressional attention the libra associationthe group founded to fund libra and provide oversight over ithas seen an exodus of original founding partners including paypal visa and mastercard,2
according to the 2007 survey of consumer finances scf home equity accounted for about half of the total net worth for low and moderateincome families which made them extremely vulnerable to the eventual housing market collapse10 families at the lower end of the income distribution saw a substantial drop in their net worth between 2007 and 2009 and families in the middle of the income distribution fared even worse11 combined with widespread unemployment housing and stock price declines and increasing rates of mortgage defaults foreclosures and bankruptcies the assets of many american families have been significantly eroded,2
these are believed to have stimulative or contractive effects on economic activity through some mechanism which though imperfectly observed is nonetheless believed to be operative though with variable lagssome analysts prefer to examine monetary behavior in the prenatal period that is by focusing on the creation of reserves that in turn leads the banking system to expand its assets in a way that4digitized for fraser httpfraserstlouisfedorg federal reserve bank of st louis4i have another bone to pick with the particular time spans chosen for analysis,2
as investors and creditors lost confidence in the ability of certain firms to meet their obligations their access to capital markets as well as to shortterm funding markets became increasingly impaired and their stock prices fell sharply,2
the examination which embraces every activity found in the bank has three immediate and primary purposes 1 to determine whether the banks assets are intact are worth their book value and afford anple liquidity for the volume and type of deposits 2 to detect violations of law or regulations and 3 to discover whether the bank is being operated in accordance with sound banking principles,2
the first is broadly appreciated by being clear about their objectives central banks are better able to achieve those objectives,2
reserve banks also foster a sound and efficient banking system by providing
 innovative and lowcost services to commercial banks,2
suppose instead we attack the problem by imposing capital requirements that are an increasing function of bank size,2
there was also growing evidence that heavy demands for credit were likely to be with us for some time to come,2
for example if the loss to the financial system from the failure of a sifi would be five times that resulting from failure of the nonsystemic firm then the sifi would have to hold additional capital sufficient to make the expected probability of failure onefifth that of the nonsifi,2
but it has been a formidable episode of financial turbulence that has revealed major weaknesses in our financial system including the business practices of many banks,2
in these circumstances measures to address financial market problems within each country are likely to be more effective if other countries are also taking similar steps as they are doing not only in monetary policy but also in their efforts to recapitalize banks guarantee bank obligations and shore up the confidence of lenders,2
the action
 was not a monetary policy action in the conventional sense but a response to the physical disruption of the payments system,2
banks that hold both a debt and equity stake in a firm would probably be better able to deter excessive risk taking by the other equity holders and might even have access to better information about the firm,2
we then put in place a regulatory and supervisory framework to counter these moral hazard incentives,2
according to the impact study this revision reduced the estimated global liquidity requirement from roughly 23 trillion to 900 billion14 the result is a margin regime that will protect the financial system from the largest and most systemic exposures while also reducing overall liquidity costs and providing relief to smaller derivatives market participants,2
banking organizations that do not meet one of the criteria would not be subject to a market risk capital charge regardless of whether they apply the basel i or basel ii rules for credit and operational risk,2
conflicting interests of banks and other shareholders might also be manifested through banks encouraging firms to take on more debt to pay higher interest rates on their debt or to undertake lessrisky projects than would be optimal from the point of view of shareholders,2
we should strive for a financial system that is robust to large shocks and to the unavoidable errors of judgment made by individuals or single organizations,2
establishing a coherent and stable financial regulatory regime will require rolling back expectations about how the policymakers will respond to the next financial market disturbance or the next recession,2
the key in designing approaches to enhance market discipline is therefore to ensure a favorable tradeoffsufficiently better controlled risktaking in good times and bad times relative to somewhat aggravated risks during periods of overall stress,2
but policymakers should recognize that financial market turmoil is not a gardenvariety shock to output,2
at various times we learned that a financial market was strained stressed under liquidity pressures dysfunctional frozen clogged or had seized up,2
first we have eased monetary policy substantially and proactively to address the sharp deterioration in financial conditions and to forestall some of the potential adverse effects on the broader economy,2
similarly this approach would not impose a cap on intragroup flows thereby allowing foreign banks in sound financial condition to continue to obtain us dollar funding for their global operations through their us entities,2
freeing banks to compete fairly with other financial institutions is good
 not just for banks but also for businesses and consumersin fact for the economy as a whole,2
the second of davids open issueswhether central banks should lean against possible asset price bubbleswas the key topic in my discussion here eighteen months ago at otmars festschrift,2
many economies have become more resilient and more capable of withstanding 
         shocks but financial markets themselves seem to have become more sensitive 
         to realtime data,2
while mechanisms already exist to address large banking failures we also need an effective process to resolve failing nonbank institutions that limits market disruption and minimize moral hazard,2
to minimize moral hazard concerns the federal reserve believes it essential that the regulatory regime for these institutions include strong prudential requirements for credit and liquidity risk management robust liquidity buffers the maintenance of adequate amounts of highquality collateral and effective memberdefault procedures,2
our hope is that the guidance we offer on these various topics is becoming more consistent with financial institutions own riskmanagement practices,2
clearly in this situation financial markets and the feds focus on our dual mandate responsibilities would ultimately lead to more restrictive financial conditions,2
working through supervisory channels has the advantage not only of helping make financial institutions better able to cope with possible asset price declines but possibly also of indirectly restraining extreme asset prices if they have been stimulated by excessive bank financing,2
the result was a hoarding of capital and liquidity a sharp increase in risk premiums and a generalized flight to liquidity and safety that only gathered momentum as instabilities in the economy and financial markets fed off each other,2
for instance the boards advance notice of proposed rulemaking anpr on insurance capital requirements set out two frameworks for capital standards that are each unlike the boards capital rules for bank holding companies8 the bba as set out in the anpr was fashioned as a framework that builds upon the regulatory capital rules of subsidiaries functional regulatorsstate or foreign insurance regulators for insurance subsidiaries and federal banking regulators for insured depository institutionsto provide a consolidated capital requirement,2
first how skewed is the distribution of gains from the stock market,2
while this new framework has the same goal as the previous comprehensive capital analysis and review ccar frameworkâU0080U0094using forwardlooking analysis to help ensure that banks have sufficient capital to survive a severe recession while still being able to lend to businesses and householdâU0080U0094it integrates our stress testing regime with our ongoing capital requirements so that large banks now have a single suite of dynamic and risksensitive capital requirements,2
in the past at this conference we have evaluated how changes in technology deregulation and increased competition have affected the activities of banks and the banking industry,2
there was concern that the turbulence in the financial markets could
 slow economic activity in coming months,2
during the past two years we have been concerned at various stages by the possible negative effects on the us economy of the greek debt crisis by the 20 percent appreciation of the tradeweighted dollar by the chinese growth slowdown and accompanying exchange rate uncertainties by the financial market turbulence during the first six weeks of this year by the dismaying pothole in job growth this may and by brexitamong other shocks,2
to the extent that recent financial market turbulence signals an increased chance of a further slowing of growth abroad oil prices could resume falling and the dollar could start rising again,2
third a healthy banking system is an integral part of participation in the modern financial environment and also is a particularly important buffer against future financial shocks both domestic and external,2
at the january fomc meeting with our current projections for economic activity and inflation in mind the committee decided that more accommodative financial conditions would be appropriate to help bring both inflation and unemployment back over time to levels viewed as consistent with the fomcs longerrun objectives mandated by the congress,2
as i will discuss later this episode underscores the important connection for banks between capital adequacy and liquidity particularly in times of financial market stress,2
from my point of view as a central banker the key to continued longterm stable growth
 in latin america and the caribbeanin addition to the macroeconomic policies that have already
 been put in place
 depends on having a strong financial system in place in each country,2
the united states has experienced periodic episodes of financial system stress followed by
 curative adjustment and reform,2
because the failure of or loss of confidence in a major clearinghouse would create enormous uncertainty about the status of initiated transactions and consequently about the financial positions of clearinghouse participants and their customers strong risk management at these organizations as well as effective prudential oversight is essential,2
the real estate settlement procedures act respa prohibits lenders from paying fees to brokers that are not reasonably related to the value of services performed by the broker,2
in fact although no bull market goes on forever historically it has by no means been the case that strong bull markets are inevitably followed by raging bears8   further the fact that a particular rise in asset prices happens to be followed by a price decline does not prove that the initial increase was irrational or unjustifiedsometimes strategies that are perfectly reasonable ex ante just dont pan out as every bridge player knows,2
as the ssg report indicates some firms had a poor understanding of the risks inherent in certain complex products or failed to recognize that certain activities contained latent risks that could be manifest in unexpected concentrations of risk exposures when market turbulence arose,2
even in the absence of any firm that may individually seem too big or too interconnected to be allowed to fail the financial system can be vulnerable to contagion,2
market discipline can improve financial stability by aligning risks and rewards more closely,2
discretion in lending practices runs the risk of exacerbating moral hazard and encouraging
 financial institutions to take excessive amounts of risk,2
specifically growth appeared likely to slow significantly in the fourth quarter from its rapid thirdquarter rate and to remain sluggish in early 2008 the committee expected that economic growth would thereafter gradually return to a pace approaching its longrun trend as the drag from housing subsided and financial conditions improved,2
consequently the second component of the federal reserves strategy has been to support the functioning of credit markets and to reduce financial strains by providing liquidity to the private sectorthat is by lending cash or its equivalent secured with relatively illiquid assets,2
but we have seen similar periods of volatility in recent yearsincluding in the second half of 2011that have left little visible imprint on the economy and it is still early to judge the ramifications of the increased market volatility of the first seven weeks of 2016 as chair yellen said in her testimony to the congress two weeks ago while global financial developments could produce a slowing in the economy i think we want to be careful not to jump to a premature conclusion about what is in store for the us,2
banks also hold capital above regulatory minimums to support their strategic objectives,2
and we need to continue to work with banks to improve their riskmanagement and creditevaluation systems so that the banks are not vulnerable to unexpected movements in interest rates or asset prices in the future,2
because the real economy is more stable on average not
 only will the cyclical variability in the yield curve decline but the risk premium will also
 decline further limiting the overall premium built in to long rates,2
during recent decades unsustainable increases in asset prices have been associated on a number of occasions with botched financial liberalization in both emergingmarket and industrialized countries,2
these include accommodative monetary policy household balance sheets that have improved greatly since the recession continued progress in the labor market a more resilient banking system and low oil prices,2
instead we should think about whether or not particular financial innovations are improving peoples wellbeing,2
we need only look to the performance of community banks during the financial crisis to see how well they leverage this local knowledge and their relationships to make lending decisions,2
a second priority for bank supervisors is to continue to develop procedures that make sure no bank is too big to fail in these senses that stockholders can lose all that existing management can be replaced that uninsured creditors can suffer losses and that the institution can be wound down and possibly sold in whole or in part in an orderly way,2
the linkage of much slower price increases and bank failures is most
 apparent among farm banks which have seen crop prices and incomes of their customers
 decline while the value of farm land dipped as much as 50 percent in some areas,2
in my example the airline could buy a forward contract or a call option on jet fuel to hedge its risk and thereby increase its financial stability,2
although we have seen signs of improvement financial market functioning remains impaired in many ways and we will need to continue to consider whether additional steps are needed to reopen credit flows and support the economy,2
for example movements in collateral values can trigger margin calls and fire sales of assets and thus activities that depend on marketvalued collateral can be vulnerable,2
for example some observers have raised concerns that by driving longerterm yields lower nontraditional policies could induce an imprudent reach for yield by some investors and thereby threaten financial stability,2
of course banks are being careful lenders and the supply of credit does appear to have tightened more recently especially for less creditworthy borrowers,2
however as a longtime student of banking and financial crises i can attest that the current situation also has much in common with past experiences,2
earlier in 2007 markets perceived that subprime mortgage credit quality was deteriorating markedly,2
in particular since early this year investors have become increasingly concerned about the credit quality of mortgages especially subprime mortgages,2
those principles include expanded engagement with a broad range of stakeholders and experts rigorous and careful examination of financial vulnerabilities that may threaten our financial system and analytical examination of past reforms to ensure that they are making the financial system as resilient as it can be in the most efficient manner possible,2
strengthening resilience of financial markets reducing the likelihood of a severe financial crisis also requires strengthening the capacity of our financial markets and infrastructure to absorb shocks,2
we felt it was important to tailor implementation of basel ii to our own individual banking and financial environment as other authorities will be doing for their own markets even though it means the reconciliation of the different approaches to implementation across countries will create some complications for banking organizations,2
it is also clear that there will be a significant number of voluntary adopters of basel ii in the united states,2
for instance an increase in savings as 
         a growing share of the population nears retirement may reduce real rates 
         and raise asset prices,2
second the passage of the gramm leach bliley act in late 1999 recognized many of the market realities i discussed with you in 1998 and provided increased opportunity for the formation of large financial conglomerates,2
as you will hear recent readings on the economy suggest that the pace of economic activity has picked up of late our financial system is healthy and inflation pressures remain subdued,2
stock market losses during 2000 to 2002 had significantly eroded the value of pension assets while sharply declining interest rates had raised the current value of plan liabilities,2
here the longterm story is the technologydriven wave of innovation in retail credit delivery that dramatically expanded access to mortgage credit over the last decade just as it expanded access to unsecured consumer credit earlier on,2
but i will say this  while there are many risks in the policy that the fed has been pursuing and  god and anyone who has suffered through my speeches the past few years knows i  fret about those risks every manufacturer of goods in america has been given  a great gift by your central bankthe lowest cost of money in 237 years an extension  of the roaring bond market rally that has now run 32 years and a broad stock  market rally that began in march of 2009 and has gone on to bust through all  previous record highs,2
and although we have weathered the worst of the financial crisis we
 are still learning a lot about the effects of our policy tools on the
 economy as the recovery takes hold,2
the potential consequences of disruption in the financial system are so farreaching and the erosion of market discipline resulting from the government safety net sufficiently material that it is neither safe nor reasonable to rely entirely on afterthefact enforcement to ensure regulatory compliance,2
if policymakers are to detect emerging threats to the financial system we must understand the determinants of systemic risk and develop appropriate metrics for measuring it,2
if lenders
 including community bankers continue their prudent lending practices household financial
 conditions should be all the more likely to weather future challenges,2
however when there is a twoway feedback between financial conditions and fomc actions an initial perception that noisy recent data play a central role in the policy process can become somewhat selffulfilling and can itself be the cause of extraneous volatility in asset prices,2
any onset of increased investor caution elevates risk premiums and as a consequence lowers asset values and promotes the liquidation of the debt that supported higher asset prices,2
but in periods of severe financial stress such leverage too often brought down banking institutions and in some cases precipitated financial crises that led to recession or worse,2
a second benefit of simple rules is that they help financial market participants form a baseline for expectations regarding the future course of monetary policy,2
rather existing research suggests that asset price volatility remains 
         largely a reflection of variation in investors discount rates rather 
         than of changes in forecasts of fundamentals,2
drawing on recent work undertaken by a number of national regulators the fsf noted that there have been significant advances in risk management practices at financial institutions and strengthening of market infrastructure in recent years,2
the fifth and final regulatory change i want to mention is that the doddfrank act also gave the federal reserve more explicit responsibilities for safeguarding financial stability,2
likewise banks have a shared interest in ensuring that regulation overall promotes a strong and stable financial system that keeps credit flowing to households and businesses in the communities you serve,2
then these forces can come to sudden stops followed by a reversal of capital
 flows falling asset prices and credit contraction because of shrinking collateral for loans,2
in short intervening in the
 market process can create moral hazard and weaken market discipline,2
but central clearing will only make the financial system safer if ccps themselves are run safely,2
the absence of such direct measures of financial stability however suggests that we should continue to present our views of potential financial risks and their associated propagation mechanisms both to other publicsector colleagues and to privatesector analysts and observers,2
i am also skeptical about how effective or desirable monetary policy can be in
 restraining such asset price booms if they do occur,2
in addition financial conditions were accommodative for much of the year,2
appropriately given the unique position of the federal reserve and the sensitivity of financial markets to its communications these steps have generally been incremental in nature but taken together they have substantially increased the ability of the american public to understand and to anticipate monetary policy decisions,2
2 this clarification appears to have reduced market uncertainty about the committees current policy expectations,2
for example if regulators with responsibility for one sector believe that the failure of regulators with responsibility for another sector to act on financial stability concerns is creating debilitating disadvantages for firms in the first sector they might be tempted to relax regulation on their firms even though they might agree that the best outcome would be to retain their existing regulations but have the other sector subject to some constraints as well,2
some of the effects of the us subprime mortgage crisis on financial markets in these countries occurred as a result of direct or indirect balance sheet exposures by their financial institutions to us securities,2
furthermore as i have emphasized in my writings mishkin 2006a financial globalization can help promote institutional reforms that can make the financial system more stable thereby contributing to more output stability,2
this is because during the last two decades there have been instances throughout the developed and developing worlds of prolonged buildups and sharp collapses in asset prices in stock housing and foreign exchange markets,2
conclusion        it is sobering to recognize that more than four years after the failure of bear stearns began the acute phase of the financial crisis so much remains to be donein implementing reforms that have already been developed in modifying or supplementing these reforms as needed and in fashioning a reform program to address shadow banking concerns,2
however the bankruptcy code does not always protect the publics strong interest in avoiding the disorderly collapse of a nonbank financial firm that could destabilize the financial system and damage the economy,2
but policymakers must also adapt their supervisory and regulatory structures to promote a robust financial system that can withstand occasional shocks even severe ones without systemic problems that become destabilizing,2
the doddfrank act does give regulators authority to require divestitures by firms posing risks to financial stability,2
will
 
 5too bíg to fail policymakers and bank regulators have relied on the specter of the risk
 
 of systemic failures in the financial system to justify the policy of toobigtofail,2
on october 3 on the recommendation of the administration and with the strong support of the federal reserve the congress approved the creation of the troubled asset relief program or tarp with a maximum authorization of 700 billion to support the stabilization of the us financial system,2
the acquisition of bear stearns by jpmorgan chase was facilitated by a federal reserve loan against a designated set of assets and the provision of liquidity to aig was collateralized by the assets of the largest insurance company in the united states,2
whats ahead
 i know you are most interested in the path from herethe path to recovery in the financial markets and by my inclusion the broader economy,2
at the height of the crisis we provided liquidity to help avert a collapse of the financial system which enabled banks and other institutions to continue to provide credit to people and businesses depending on it,2
policymakers tend to rescue the creditors of failing financial firms more often than they would have those creditors believe with the inevitable result that market expectations about the likelihood of bailouts increased7the ultimate result of constructive ambiguity was that the implicit safety net grew to include much of the socalled shadow banking system which i will discuss shortly,2
liquiditystrained institutions found themselves forced to sell positions which placed additional downward pressure on asset prices thereby accelerating margin calls on leveraged actors and amplifying marktomarket losses for all holders of the assets,2
the failure of lehman brothers highlighted the lack of a framework that would allow for the orderly resolution of a systemically important nonbank financial institution in the united states,2
in the popular press this was better known as the bank stress tests,2
i had hoped that the us would have led the world in setting out a concrete proposal to implement the basel iii endgame by the end of last year but the intervention of covid set back that timetable and although we are working hard with the other banking agencies to iron out the last issues our proposal will have to come after my departure,2
thus what we might refer to as the prototypical form of shadow banking presented the kind of risk associated with traditional banking prior to the creation of deposit insurancethat of destabilizing shortterm creditor runs that lead to defaults and asset fire sales,2
given new yorks preeminence as a center of global finance i thought it would be appropriate to discuss just such a topic which is how the federal reserve oversees the largest financial institutions many of which are headquartered or have a major presence here and how that oversight has strengthened since the financial crisis1    the financial crisis and large financial institutions        the crisis had many causes including the numerous factors that drove a lengthy housing boom and the expansion of a largely unregulated shadow banking system rivaling the traditional banking sector in size,2
by imposing a more standardized regulatory structure on the us operations of foreign banks we can ensure that enhanced prudential standards are applied consistently across foreign banks and in comparable ways between us banking organizations and foreign banking organizations,2
calibrating the enhanced capital standards        as i mentioned earlier the minimum and conservation buffer capital requirements of basel iii were calibrated by looking to the loss experience of larger banks,2
by lending to solvent institutions against illiquid collateral central banks effectively step in to assume the liquidity risk of such assetsthat is the risk that assets can only be sold in the near term at fire sale prices,2
but business spending moderated in the second half of the year as financial conditions tightened and uncertainty over tariffs trade policy and growth abroad began to weigh on manufacturers and other firms dependent on exports,2
bank capital and too big to fail
 let me turn now to the second prong of eliminating too big to fail  preventive measures that
 reduce the probability that a financial firm will fail in the first place,2
features of the enhanced capital requirement        while doddfrank mandates an enhanced capital requirement for sifis it does not specify the form of that requirement,2
first the doddfrank act established the financial stability oversight council fsoc which has the authority to bring within the perimeter of prudential regulation any nonbank financial firm whose failure could be the source of systemic problems,2
if the largest institutions were too big to fail during the financial crisis why not make them smaller,2
thus i believe that the real issue of whether adjustments in interest rates should be used to deal with problems of potential financial instability is macroeconomic and that if asset prices across the economythat is taking all financial markets into accountare thought to be excessively high raising the interest rate may be the appropriate step,2
the point is that starting with the collapse  of lehman brothers in september 2008 economic policy uncertainty has been  consistently high and half the time it has been extraordinarily high,2
putting it all together this reasoning suggests that the credit risk premiumas measured say by a forecasting model like that of greenwood and hansonmay be an operationally useful measure of financial market vulnerability,2
the more stringent regulation of the banking sector may push shortterm financing activities to less regulated entities,2
as shown in figure 5 assets under management in investmentgrade and highyield corporate bond mutual funds the solid blue area have hovered around 25 to 30 percent of the amount of outstanding corporate bonds in recent years up from about 15 percent before the crisisi          reduced market liquidity might exacerbate fire sale risks from leverage at financial institutions or from firstmover advantage at mutual funds,2
these requirements are designed to lower their probability of material financial distress or failure in order to prevent or mitigate risks to the financial stability of the united states5  the proposed capital surcharge is the regulatory requirement that is most clearly calibrated to the size and complexity of an institution,2
the federal reserve recently became a full member of the network for greening the financial system ngfs a network of more than 80 central banks and supervisory authorities from around the world that focuses on sharing research and identifying best practices to ensure the financial system is resilient to climaterelated risks,2
thus both deregulation of the financial system and innovations in financial
 products have lessened the risk of asset price declines triggering substantial adverse
 effects in the financial sector,2
a second major force for change has been
 the rapid growth of bank holding
 companies and their nonbank affiliates,2
what monetary policy can do in response to
 current credit market problems is to provide the stable monetary
 environment necessary for investment and economic growth,2
however businesscycle conditions also
 influence rates as credit demands rise and fall
 with the cycle,2
the third change interstate banking has also become widespread despite the
 mcfadden act which limits national banks to branching within their headquarters state
 and the douglas amendment to the bank holding company act of 1956 which prohibits
 interstate expansion through acquisitions of banks in another state unless explicitly
 authorized by that state,2
they also raise the minimum standard o f total capital to
 
 riskweighted assets to 8 percent by 1992
 
 in sum the agenda for congress is to broaden banks powers to worldclass
 standards while decreasing the public exposure and moral hazard associated with deposit
 insurance,2
this situation is being called a credit crunch by some and a lack of credit
 demand by others,2
currently there is
 considerable financial market concern that foreign savers are becoming
 increasingly reluctant to place more of their savings in the us
 indeed there is growing fear that foreigners may even decide to pull
 their previous savings out of the us as well,2
a gradual removal of accommodation helps avoid a buildup of risks to macroeconomic stability that could arise if the economy is allowed to overheat as well as risks to financial stability if interest rates remain too low and encourage investors to take on excessively risky investments in a search for yield,2
last years landmark financial reform legislation  the dodd frank wall street reform and consumer protection act of 2010  seeks to close the gap between the scope of prudential regulation and the scope of the implicit safety net,2
if expectations of support for the creditors of financially distressed institutions are widespread regulators will likely feel forced to provide support to these shortterm creditors to avoid the turbulence of disappointing expectations,2
it has arisen in direct response to the strong expansion in retail credit,2
it should be understood that if the united states resorts to protective trade barriers which lead to a breakdown down in pricing discipline the ultimate result will be higher interest rates and a tighter monetary policyheadway in reducing the federal budget deficit also has been slow,3
while shifts in is and lm curves can theoretically substitute for one another in academic models of stabilization policy empirical evidence suggests that monetary policy likely dominates fiscal policy as a  determinant of changes both in aggregate demand and inflation,3
our huge and growing trade deficit and themuch slower rate of us growth for some months  whilenot in itself exceptional during an expansion period should also be reminders enough that the responsibility forencouraging growth should not fall on one country aloneindeed looking ahead the historically high levels ofunemployment that have persisted in europe for some timefand the progress that has been made against inflationsuggest the potential for aboveaverage growth rates inthat key industrial center for a whileto me it is obvious as well that prospects forbalanced growth with more moderate interest rates in thiscountry would be greatly enhanced by a strong and earlyattack on our now chronically large budget deficit,3
probably the most important problem is the very large federal budget deficit,3
inthis regard a continued reduction in the federal deficit is crucial,3
substantial reductions in  federal budget deficits would ameliorate the situation but further progress beyond the recent budget compromise lies in the futureanother factor that could contribute to reduced inbalances would be somewhat faster economic growth in industrialized nations abroad,3
it therefore makes sense to reduce the federal deficit through spending restraint rather than the imposition of new taxes,3
if the private sector in any event could not find productive use for the money even if interest rates were lower and the functioning of markets improved no idmediate damage would be done by even a high budget deficit,3
consequently even though the trade balance will improve only slowly
 over the next two years the volume of exportsand imports as wellis likely to continue
 growing,3
for example the fiscal 1975 budget proposed by the administration is an increase of 12 per cent over fiscal 1974 which was an 8 per cent increase over 1973 with the real economy growing at about 4 per cent per year on average in recent years and the dramatic size of government spending totals we must question the inevitable annual dramatic increases in government spending,3
in particular saving may increase so as to finance the deficit without increasing interest rates or crowding out private sector activitythe effects of deficits also depend on the reaction of monetary policy,3
borrowing to finance budget deficits increases the governments total outstanding debt,3
conversely suppose that expansionary fiscal policy resulted in a rise in budget deficits,3
yet there is little evidence indicating that reductions of government spending have lasting adverse effects on overall economic growth,3
this conflict is due to the adverse effects higher tax rates have on incentives to work save invest and innovate,3
i do not believe that it is just a coincidence that two of the longest most vigorous noninflationary economic expansions of this century occurred after major tax rate reductions and during periods of relatively restrained monetary policy,3
according to the congressional budget office estimates this agreement will lead to significant reductions in the budget deficit over the next few years,3
attempts to curtail foreign investment could cause the exchange rate to decline sharply and interest rates to increase thereby crowding out private investment,3
if the restructurers assessment of the potential of the corporation is correct and the necessary funds are  forthcoming a more efficient allocation of resources resultsmore generally the validity of the freecash flow theory as an explanation for the recent wave of corporate restructuring in the american economy depends on the truth of three key assertions 1 many corporations are in fact managed inefficiently 2 the stock market recognizes inefficient management and as a result share prices trade at significant discounts and 3 lenders correctly judge that the freecash flow will comfortably support the increased debt burden incurred to finance the upfront payment to shareholders of the acquired corporationthe history of the oil industry in the early 1980s provides the clearest evidence for the freecash flow theory and is no doubt familiar to many in the audience here today,3
sharplyhigher interest rates increased debt service requirements rapidlyrelative to the capacity to service debt,3
unemployment causes large federal deficits which contribute to inflation,3
h o w well even approach price stability unless
 
 w e keep m o r e restraint on federal spending or increase taxes is difficult
 to foresee,3
longterm reinvestment and to sane extent even that of the nearterm is seriously jeopardized however by the consequences of our current  8gargantuan and unprecedented federal budget deficits and more importantly by the even larger deficits projected for years to ccmethe resulting imbalances and sane of the deleterious repercussions are already apparent,3
broadening the access to home ownership sharing prosperity and insuring opportunity
 monetary and fiscal policies have not been the only public policies that have benefited the housing industry in recent years,3
some market makers would then see continued high interest rates resulting from massive budget deficits and deep uncertainty,3
there is already some evidence that increases in defense spending are winding down to levels consistent with the congressional budget resolution for fiscal year 1986 a second source of strength in the third quarter was the large commodity credit corporation purchases of agricultural products,3
in my remarks today i shall proffer a set of considerations that i find quite valuable as a guide to decisions about the need for government regulation of financial markets,3
the reagan administrations orientation toward less government involvement is well known but many of the initiatives for deregulation were begun even before president reagans election,3
fiscal policy has also turned more restricive in recent quarters and indeed the president has submitted to congress a revised budget which shows a surplus for fiscal year 1981 by one measure the net swing toward restrictiveness in fiscal policy has been about 40 billion over the last couple of years,3
in recognition of the importance of financial consolidation its potential impact on market structure and its potential implications for public policy concerns the finance ministers and central bank governors of the g10 nations in late 1999 asked their deputies to study financial consolidation and its potential effects,3
my approach to the customer protection issue would be to start with the fundamental concerns of public policy and derive policy prescriptions from a careful and rigorous assessment of the need to achieve specific public policy objectives in an effective and efficient manner,3
2019 recession ready fiscal policies to stabilize the american economy,3
japan and west germany could stimulate their economies by accelerating tax
 cuts and implementing a generally more expansive fiscal policy,3
this indicates that consumers may have digested delayed  tax rebates and the increase in payroll taxes and are reaping the benefits of  lower gasoline and food prices,3
furthermore the income tax reduction of 1964 represented a substantial easing of fiscal policy which helped move the economy further toward full use of its resources while interest rates instead of declining were permitted to rise further in the hope of reducing incentives to capital outflowsthird in a more drastic departure from traditional policy the united states in 1963 introduced the interest equalization tax in order to insert a degree of insulation between the domestic and international capital markets,3
tax rates were cut and expenditures increased when recessionary forces were pervasive,3
tax rate increases of sufficient dimension to deal with our looming fiscal problems arguably pose significant risks to economic growth and the revenue base,3
more recently demands for us exports also have been adversely affected by internal adjustment programs of large developing countries necessitated by their serious external debt problems,3
a major source o f shortterm strength is fiscal policy which is highly stimulative,3
13if the federal reserve pursues a disciplined course of monetary policy in 1934 as i believe it will serious conflict is threatened with the increasingly stimulative fiscal policy embodied in current law,3
10i am extremely sensitive to the fact that rising interest rates have damaging effects on farmers on small businesses on thrift institutions and on developing countries struggling to find ways to service large external debts,3
hopefully the marginal tax rate reductions
 already in law for future dates can be brought forward and implemented earlier,3
in april that external deficit increased substantially furtherduring the first five months of 1984 the treasury borrowed 74 billion on its way to financing a gap between federal receipts and expendituresboth on and off budget that will probably total about 195 billion during this calendar yeari would like to talk with you briefly today about our internal deficitthat is the deficit in the federal budgetand our external deficitsthe deficits on merchandise trade and current accountand the relationship between them,3
perhaps those that are disadvantaged by an overcid173valued dollar and large external deficits should take comfort in the fact that the present situation cannot last indefinitely,3
however although the paygo budget rule for example appeared to help keep legislation from increasing federal deficits for a number of years paygo did not provide a mechanism to deal with the longterm budget imbalances already in place,3
too frequently their economic growth has been constrained and stifled by
 a large public sectors unintended effects on the economy and its ability to adapt to
 change,3
consumer spending which accounts for more than twothirds of us gdp proved to be
 quite resilient in 2013 despite the rise in payroll taxes at the start of the year a
 government shutdown significant uncertainties about future tax policy and the
 implications of healthcare reform,3
were a government regulator a private business and an academic research center,3
we are in the midst of a massive cutback in defense spending which will result in the virtual elimination of many kinds of jobs,3
first tax increases and spending cuts of the magnitude proposed enacted simultaneously must be assumed to be contractionary,3
recognizing that a onesizefitsall approach is seldom appropriate it may be useful to offer transactors a choice between seeking the benefits and accepting the burdens of government regulation or forgoing those benefits and avoiding those burdens by transacting in financial markets that are only privately regulated,3
2the full employment and balanced growth act of 1978 the humphreyhawkins act requires the federal reserve to carry out monetary policy in a manner consistent with the maintenance of full employment and balanced growth,3
according to that prescription such a sprint was to be followed by quick fiscal and monetary restraint as the capacity ceiling wa being approached to slow the economy down to its longrun potential growth rate,3
conversely decisions that reduce either the current level or the growth of
 government expenditures from what they otherwise would have been are a
 genuine reduction in tax burdens even if explicit tax revenue is not altered,3
finally a tighter fiscal policy would reduce the governments borrowing in the capital market and given a monetary policy that maintains a constant growth of money and credit would lead to lower interest ratesenergetic restraint of government spending is desirable for still another reason,3
meanwhile without oil taxes as a share of gdp are still among the lowest in  latin america despite the current governments bold efforts to increase tax  revenue,3
the first is the federal budget deficit which will remain
 
 far too high for yet another year in 1990 the second is related to the first our need to
 finance
 
 excess government spending
 
 with imported capital has led to continuing
 
 imbalances in trade between the united states and our major trading partners,3
the benefits of a tax cut of increased public spending are felt within a few weeks or quarters,3
the proceeds of the tax would be used to reduce income taxes in the lower brackets or alternatively to compensate the employees of the taxpaying companies in proportion to their wage shortfall with respect to profitsthe excess profits tax would take the form of an increase in the regular corporate income tax for all corporations whether they had abnormal profits or not,3
g0 current account in the balance of payments has improvedthough less than we would have liked,3
it includes personalincome tax cuts
 and accelerated depreciation w riteoffs designed
 to stim ulate a longawaited improvement in
 productivityenhancing investment,3
as interstate taxation of depositories but also on the subcid173jects as broad as all regulatory reform the economy may be growing better than even the most optimistic analyses in the short run the longer range problems unemployment productivity capital formation energy conversion large government deficits and inflation are still to be resolved i suggest that a comprehensive regulatory reform review can be useful to the resolution of these issues in the most utopian view we can get rid of unintended and debilitating side effects from present law and regulation we may even get rid of bad law perhaps although im not too optimistic about that but surely this is also a process of national education that will help identify priorities and balance them in full view of the electorate all of this will be a very politically difficult program but just as importantto the tennessee bankers association as regulation q or the ftc decision on the liabilities of a holder in due course  i am sure you will have a good convention and i am 0e6ighted to ave been able to join you i think i will go by the hermitage this afternoon on my way out of town from what andrew jackson said when he opposed grantin control of the currency to the general government i think he would be r6eased that monetary policy is in the hands of the federal reserve thank you  t,3
a personal tax cut of perhaps 35 billion as is being talked about would further increase the amount to be borrowed depending on when the cut became effectiveif that borrowing were made easier by the federal reserve through an increased growth in the money supply it would surely be inflationaryif the fed did not make borrowing easier interest rates would go up,3
sizable fiscal stimulus has provided an important boost to demand this year and will likely contribute somewhat further next year given the usual lags in outlays and in the effects of tax cuts on business and household spending,3
at the same time some businesses attributed the firmwide bonuses they paid to workers at the end of the year to the tax cuts and others have taken the occasion to implement wage increases they had contemplated for some time,3
these are
 financial services industry restructuring the federal budget deficit and inflation,3
a more flexible fiscal policy would also reduce the likelihood that demand pressures on the economy would cumulate to the point where they become difficult if not impossible to control without undesired sideeffects,3
when the government runs deficits it siphons off private savings reducing national saving leaving less available for capital investment,3
notably concerns about the ability of greece and a number of other euroarea countries to manage their sizable budget deficits and high levels of public debt roiled global financial markets in the spring including our own,3
on the other
 hand increased government expenditures are viewed as adding directly
 to total demand and tax reductions are thought to add to disposable
 income which subsequently is used to purchase goods and services,3
government spending has increased substantially in the past year contributing importantly to the recovery but it will be much less of a stimulant to the economy this year,3
new and substantial tax reductions occurred again in 1969 and 1971 and they too were followed by massive increases of expenditures,3
takehome pay was boosted by the frontloading of
 
 the 23billion tax reduction act which included not only the tax
 reductions but also some increases in socialsecurity and other transfer
 payments,3
on the upside the tax package and increased federal spending in the us are expected to add to an already healthy level of spending in the second half of this year and next year but the magnitudes and exact timing are still somewhat uncertain,3
budget surpluses
 were projectedand for a brief time
 actually realized partly because of
 increased aid from washington and
 also because of such factors as a wide
 spread increase in tax rates and a falling
 real demand for costly educational
 services,3
although tax action would reduce the federal governments need to borrow during the fiscal year beginning july 1 the treasury may still have to borrow a sizable amount during the summer months,3
tht program includes a commiment to greater fiscal restraint through the containment of federal spending,3
in the united states the
 feds job could be greatly enhanced by congressional commitment to control federal spending
 
 
 
 
 13
 and legislative action to modernize our banking system,3
in the early 1980s this linkage between the fiscal regime and the implications for
 the monetary environments was labeled the dismal arithmetic of monetarism this
 premise held that any country that found it politically difficult to achieve and maintain a
 disciplined fiscal policy would ultimately resort to the unlegislated tax of debasing the
 currency,3
even more important is to gain better control over federal spending and to reduce the relative role of federal expenditured in our national economy,3
the consequence is that it will take an immediate payroll tax increase now estimated at 26 percent bringing the total to 15 percent just to pay for the present benefit system over the standard seventyfive year forecasting period and a greater tax increase if this period is extended even a few years,3
for our failure to control inflation after the mid1960s was a key element in the rapid deterioration of our balance of payments,3
the midwest states have done a good job in developing prudent fiscal policies,3
it was a slow and
 tedious process to get congress to enact the tax cut but it seems
 even more of a task to obtain a tax increase since late 1965 the
 economy has obviously needed fiscal restraint a tax increase or
 less government spending but congress has not acted,3
incomes in the north east areas of the country and in the mid and far west will sustain at a given tax rate higher levels of public expenditures than will those7digitized for fraser httpfraserstlouisfedorg federal reserve bank of st louis7from a high of 551 per person in one state to the low of 221 in anothercid173the difference between the two being greater than the national average a less dranatic but more scientific way of sunmarizing the excid173tent of differences in total expenditure pattens would be to compute a measure of relative dispersion which would tell us how closely clustered the various states were to the u s average,3
then unless the stimulus
 of huge government deficits financed by rapid monetary expansion is
 removed only gradually the economy would again suffer from inadequate
 
 demand falling production and rising unemployment,3
this can
 be clearly seen from the fact that in 1975 when
 the us had a 9billion trade surplus the
 international value of the dollar was even lower
 than now yet in 1976 and the first half of
 1977 the value of the dollar actually increased
 while the trade balance deteriorated,3
a more useful question for debate regarding monetary policy thus far in the 1960s is whether a still easier policy might not have speeded up economic expansion in 1962 and 1963before the tax cut was enacted,3
monetaey control and sound fiscal policies orderly economic growth and reasonably stable prices m compatible i decline to aocept the doctrine thet we can not have price stability without heavy unemployment,3
while the rise in the federal governments purchases of goods and services particularly for defense purposes was the major source of pressure on real resources during much of the period variations in business expenditures for fixed equipment also had a signifcid173icant role,3
since 1947 the federal debt has increased from 257 to 290 billion and there have been some serious deficits since 1958 the increase in federal debt is not as disturbing in view of the growth of gnp and the national income as the tendency for observers around the iorld to i1onder if recurrent budget deficits signal difficulty ahead in maintaincid173ing the value of the dollar esnecially if we do not have surpluses in boom ye,3
throughout the current long business expansion the federal reserve has aimed at supplying banks with enough reserves to accomcid173modate the needs of a growing domestic economy but hopefully not so much as to promote excessive and inflationary use of credit at home or to contribute to a worsening balance of payments situation internationally,3
when the united states entered world war i income taxes were increased sharply in 1917 tax rates were also raised promptly in 1941 and 1942 in connection with world war ii,3
when taxes were cut in
 1980 without parallel cuts in spending our government had to borrow increasingly to
 make up the difference,3
still it seems regrettable to have to identify one class of creditors that is eligible for losses with the presumption being that all others receive support rather than the usual approach of providing explicit government guarantees such as deposit insurance to some creditors and presuming that all others are at risk,3
the fiscal policy supports implemented early in the crisis helped mitigate the worst of the immediate fallout for many families,3
at that time the retirement of the large baby boom population was anticipated and payroll tax revenues were accumulated in advance of benefit payments steps that created the presentday cash surpluses for the social security component of the overall federal budget,3
although we have scant data on crossborder transactions among the separate states anecdotal evidence suggests that over the decades significant apparent imbalances have been resolved without precipitating interstate balance of payments crises,3
rather than raising payroll taxes he would have made transfers of general federal revenues to the social security trust fund,3
educating the public about the consequences of unsustainable fiscal policies may be one way to help build that support,3
one source of competition could be the us governments funding needs
 associated with large fiscal deficits if congress cannot maintain an effective budgetdeficit
 reduction program,3
here in the united states we have begun to deal with two of our longestrunning problems
 the increasing budget deficits and health care costs,3
as mentioned above such a fiscal austerity policy  is the only known way to correct persistent budget deficits,3
compliance with the bank secrecy act
 
 since the passage of the usa patriot act in 2001 which significantly amended the bank secrecy act compliance in this area has been a major concern for the banking industry,3
today i want to touch on two regulatory issues that are currently high on the list of both bankers and supervisors  bank secrecy act compliance and basel ii implementation,3
these efforts are intended to better ensure consistency in the bank secrecy act and antimoneylaundering supervision programs of the bank regulators and fincenthe entity within the us treasury that is statutorily responsible for the implementing the bank secrecy act,3
more than half of that represents guarantees implied by precedents rather than legislative guarantees such as deposit insurance16 
 given the rescue expectations that have built up over the last several decades i believe it will take more than a sincere pledge to limit central bank lending to solve the time consistency problem,3
such a framework could include a commitment to make a down payment on fiscal consolidation by enacting legislation to reduce the structural deficit over the next several years,3
my baseline outlook
 as you can tell from this discussion two things i see as critical for a sustainable recovery are 1 the effective control of the virus and 2 adequate additional fiscal support,3
add to this pattern of private sector spending moderate growth in government spending on goods and
 services and you have solid growth in what economists call domestic final sales,3
inflation and crowdingout
 now substantial budget deficits can be
 defended in deep recession periods because
 they support aggregate business activity at
 tim es when other credit demands are weak,3
as with float and currency those monetary managers
 who desire a prescribed market tone as a measure of monetary action
 find these shortrun fluctuations in the treasurys balances at the
 reserve banks of extreme importance,3
the fed has done a great deal to date to promote
 recovery but the ongoing effectiveness of fed efforts does depend critically on the removal of fiscal policy uncertainty,3
the adm inistration has taken an
 unprecedented step by reopening the books
 on its 1981 budget document only a month and
 a half after sending it to congress with the
 intention of ending the inflation stim ulus
 created by continued massive federal deficits,3
as a result o f massive federal budget deficits we have been exporting ious in the
 form o f treasury securities for the past five years or so,3
then i would urge
 
 you to write those people you sent to congress and express your concern
 about inflation,3
they have a wide menu of choices including
 increases in taxes  or revenue enhancements
 if you will  and reductions in various spending
 components,3
but we have to keep in mind that when baby boomers start  michael moskow speeches  1995  57  retiring theyll be paying less in taxes and receiving more in retirement benefits for a longer time than was true for previous generations,3
foremost among these is the federal budget deficit which will
 
 remain far too high for yet another year in 1990
 
 a second is related to the firsts our
 
 need to finance excess government spending with imported capital has led to continuing
 imbalances in trade between the united states and our major trading partners,3
we have already placed a substantial burden on future generations
 and we must begin to reduce the burden,3
while state and local purchases will grow government spending
 overall will be weak because purchases on the federal level are being affected by defense cutbacks
 and deficit reduction,3
while state and local purchases will grow
 government spending overall will be weak because expenditures at the federal level are being
 affected by defense cutbacks and deficit reduction,3
in technical terms the time inconsistency problem in conducting monetary policy which is one of the most important elements in the recent professional literature on policy would be much more compelling in a policy regime with a 3 to 4 percent inflation objective than in a regime firmly committed to price stability,3
more specifically any holder of a longterm bond is exposed to  interest rate risk because the value of that bond fluctuates as interest rates  vary,3
such oversight should be aimed at measuring and efficiently constraining private risk taking that could affect the extension of central bank credit or the provision of public sector support,3
as a result financial market participants are understandably apprehensive about whether a particular counterpartys mortgagerelated losses will erode their capital buffer enough to threaten their viabilitythird market participants have at times faced uncertainty about prospective public sector intervention4 the disparate responses to potential failures at several highprofile organizations this year may have made it difficult for market participants to forecast whether official support would be forthcoming for a given counterparty,3