of four other reserve banks who serve one - year terms as members on a rotating basis. one important role of the independent regional reserve banks is to ensure that diverse views are represented. the reserve banks each have economic research departments to guarantee that a wide variety of perspectives are brought to the table. in this way, the institution avoids groupthink. by being open and transparent about these various perspectives, the decentralized model for the federal reserve helps strengthen public confidence and preserve its independence. whether we vote or not, all reserve bank presidents attend the fomc meetings, participate in the discussions, and contribute to the committee ’ s assessment of the economy and policy options. the fomc has eight regularly scheduled meetings a year to set monetary policy. it discusses economic conditions and, in normal times, adjusts short - term interest rates to achieve the goals of monetary policy that congress has set for us in the federal reserve act. congress established the current set of monetary policy goals in 1978. the amended federal reserve act specifies that the fomc “ shall maintain long run growth of the monetary and credit aggregates commensurate with the economy ’ s long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long - term interest rates. ” since moderate long - term interest rates generally result when prices are stable and the economy is operating at full employment, many have interpreted these instructions as being a dual mandate to manage fluctuations in employment in the short run while preserving price stability in the long run. economic conditions in order to determine the appropriate monetary policy to promote these goals, the fomc must monitor economic developments. so, let me turn to an assessment of our economy. as we enter 2014, i think the bottom line is that the economy is on firmer footing than it has been for the past several years. bis central bankers ’ speeches real output grew at a 4. 1 percent annual pace in the third quarter of last year, the strongest gain in nearly two years and a marked acceleration from the first half of 2013. some of this growth came in the form of inventory investment, which is volatile and is less likely to have contributed as much to growth in the fourth quarter. still, personal consumption and fixed investment provided positive contributions, and economic prospects at the end of last year and the beginning of this year are positive. personal consumption, which accounts more than two - thirds of gdp, advanced at an annual rate of 2 percent in

increased significantly, tensions immediately spread from the united states to the euro area and the money market more or less stopped functioning. at that point, the eurosystem intensified its actions with a view to allowing solvent banks to carry out their activities. as a result, a number of unprecedented additional steps were taken. • thus, in mid - october the ecb took the quite exceptional step of adopting a fixed rate tender procedure with full allotment for all of its weekly main refinancing operations and its longer - term refinancing operations with maturities of up to six months. this will remain in place for as long as is necessary given the situation in the markets. • it also increased the number and frequency of longer - term refinancing operations, conducting three additional refinancing operations per month – two with a maturity of three months and one with a maturity of six months – and introducing a special - term refinancing operation with a maturity corresponding to the duration of the reserve maintenance period. • in parallel, the ecb implemented a new series of exceptional measures seeking to temporarily extend the list of assets eligible for use as collateral in eurosystem credit operations. • finally, the ecb increased the us dollar financing provided to its counterparties by conducting fixed rate tender procedures with full allotment and maturities ranging from one week to three months through swap agreements concluded with the us federal reserve system. these measures, which reflect the very significant strengthening of the eurosystem ’ s intermediation role during this period of turbulence, have allowed solvent banks continued access to liquidity despite the dysfunctional nature of the money market. they have also helped to alleviate the tensions observed in certain sectors of the money market. for example, the spread between unsecured longer - term euribor rates and the rates on overnight index swaps has declined considerably – although it remains elevated, significantly higher than the levels observed prior to september 2008. in practice, these measures allow euro area banks to obtain as much euro liquidity as they wish, whether through our weekly operations or our longer - term refinancing operations, using a wide range of assets as collateral. in total, the eurosystem ’ s balance sheet rose by about eur 600 billion since end - june 2007 and today, an increase of about 65 % ; with the assets reflecting the strong increase in the volume of liquidity provided and the liabilities reflecting banks ’ concomitant recourse to