with other agencies to ensure that firms are dedicating resources and taking the appropriate actions to defend the operations that are critical to the financial services sector against cyber threats. this is particularly true for those risks that could be channeled through interconnected organizations and that could potentially have an impact on other firms and more broadly across the sector. • fintech the financial sector, like the broader u. s. economy and society, is becoming increasingly digital and there is considerable discussion of “ fintech ” – defined simply as the intersection between financial services and new technologies. a recent industry study, for example, reports that investment in fintech companies grew from $ 1. 8 billion in 2010 to $ 19 billion in 2015. 3 it is unclear, however, whether fintech will enhance or fundamentally disrupt the financial service and payments industries, or perhaps it is some combination of both. in any of these cases, however, supervisors will have a keen interest in monitoring the impact on the business models and risks of financial institutions and the way financial intermediation is done. we observe financial firms engaging in a variety of ways with fintech companies. this can be through the development of in - house projects such as setting up innovation labs or encouraging developers to code on open application program interfaces ( apis ). this can also be through collaboration with industry consortiums to come up with unified industry standards that enhance operability and enable future technological advancements, or it can be through partnering with or investing directly in fintech companies. some of the interesting questions for supervision revolve around things like : what new benefits might these new technologies bring? will they enhance existing processes or bring about entirely new solutions to existing financial sector problems? will they create risk, mitigate risk, or simply reallocate existing risks? how should the current supervisory framework evolve to incorporate these types of developments? the new york fed is assessing the implications of fintech developments through participation in a wide range of federal reserve system, interagency, and “ digital disruption : how fintech is forcing banking to a tipping point, ” march 2016. bis central bankers ’ speeches international efforts. in addition, we meet regularly with supervised firms, fintech companies, and industry groups to follow these developments. our supervisory program will continue to evolve with the underlying technologies. • reputation risk over the past few years, the new york fed has been challenging the financial industry to consider the many factors that have contributed to recent, widespread misconduct and the perceived lack of trust in the

second, consumers are in better financial shape. households are carrying less debt, with total household liabilities roughly $ 500 billion below their cyclical peak in 2008. moreover, lower interest rates have facilitated significant mortgage debt refinancing, which has lowered the household debt service burdens. depending on the particular measure used, household debt service burdens relative to income have fallen back to levels last seen in the 1980s and 1990s. in addition, household net worth has recovered sharply, boosted primarily by higher financial asset valuations, but also by some recovery in home prices. third, the fiscal restraint that has held back growth in recent years has ended, with the federal budget deficit now at a level consistent with a stable to slowly declining federal debtto - gdp ratio. in the aggregate, state and local governments have also ended their retrenchment. one important piece of evidence in this regard is the fact that state and local see, for example, the latest blue chip consensus survey ( volume 39, no. 11, november 10, 2014 ). the median real gdp forecast for 2015 ( fourth quarter over fourth quarter ) is 2. 9 percent. bis central bankers ’ speeches government employment is now rising at between 5, 000 and 10, 000 per month, after generally contracting during the 2009 to 2012 period. now that these headwinds have subsided, buoyant financial market conditions spurred, in part, by a very accommodative monetary policy should do more to support economic activity. in particular, compared to historical patterns, the current household net worth - to - income ratio is high relative to the personal saving rate. this suggests some scope for a decline in the household saving rate. if this were to occur, consumption growth would outstrip income growth. similarly, financial market conditions are conducive to sustained gains in business fixed investment. equity prices are high, borrowing costs are low, cash flows are strong and corporate balance sheets are healthy. another positive development for both the u. s. and the global economy is the sharp decline in energy prices. let ’ s start with the u. s. perspective. despite the impressive recent gains in natural gas and crude oil production, the u. s. still is a net importer of energy. as a result, falling energy prices are beneficial for our economy. in economist parlance, falling energy prices are a positive “ terms of trade ” shock for the u. s. over the near - term, this will lead to a