inaccurate. the size of the banking system ’ s deposits with the ecb is completely determined by the ecb ’ s liquidity operations. on the ecb ’ s balance sheet, the assets it generates by lending to the banking system must also appear on the liabilities side as bank deposits with the ecb. that is, once the ecb has done its liquidity operations, the bis central bankers ’ speeches size of ecb balance sheet is what it is. the amount of deposits provides no real information above and beyond the net amount the ecb has injected into the system, which is already known. it does not tell you anything about what the banks are doing with the funds they have borrowed from the ecb. or about how many times those funds circulate before ending up back at the ecb. this is true of all central banks, not just the ecb. a similarly misleading statement is often made about the fed, with bank deposits “ piling up ” at the fed supposedly indicating that the fed ’ s policy actions are ineffective. again, the size of banks ’ deposits at the fed is the mirror image of the fed ’ s liquidity operations. one possible way to gain a handle on the impact of these operations, and the extent to which the liquidity has circulated, is to look at money multipliers. graph 2 shows money multipliers for the euro area, the us and the uk. the money multiplier is the ratio of a broad measure of the money supply to the money base, which is the part that is more or less under the control of the central bank. the graph shows that there have been large declines in the money multiplier in all three regions. graph 2 money multipliers broad money as a ratio to the money base ratio ratio uk euro area us sources : rba ; thomson reuters these declines provide some indication that the banks aren ’ t circulating the liquidity as much as was the case in the recent past. the declines are consistent with the deleveraging that is occurring in the banking sector and on private sector balance sheets. it also suggests that the economies in each of these regions are likely to have been significantly weaker if not for the large expansion of central bank balance sheets. while the ecb ’ s liquidity provision significantly reduces the funding risk for european banks, there are still pressures in terms of bank capital. a number of european banks are responding to these pressures by deleveraging rather than by raising equity

substantially above the nation. since we last met, employment in new jersey has expanded, and while that growth has been quite modest, it is an encouraging sign. in puerto rico, employment reports continue to give mixed signals, showing a see - saw pattern that has yet to add up to a strong rebound. despite these employment gains, unemployment in the region remains painfully high. in august, new york city ’ s and new jersey ’ s rates were very close to the national jobless rate of 9. 6 percent. the rate for new york state, which has been improving since the first quarter, is noticeably lower at 8. 3 percent. puerto rico, which has had much higher unemployment than the mainland for the past several decades, saw a modest decline in its jobless rate, but at 15. 6 percent is still showing little evidence of a recovery. regional housing trends in new york and new jersey we focus on housing at today ’ s briefing because it represents the most important asset that many households own, provides a substantial number of high - wage jobs and is often a key driver of regional as well as national business cycles. i ’ ll start with a key observation : during this recession, the housing sector contributed less volatility to the regional economy than it did in much of the nation. we have, of course, seen painful losses of homes, construction jobs and housing equity in new york and northern new jersey. this pattern can be seen quite directly in the construction sector, where many jobs were created during the housing boom, but then were lost as the housing market deteriorated. however, our housing markets tend to be less influential in our economy because we are a relatively mature region. that is, we are not adding population as rapidly as some other parts of the country, so housing construction – which tends to be very cyclical – and associated purchases account for a smaller share of aggregate activity here than it does in faster growing regions. in addition, much of our region was spared the worst effects of the non - prime mortgage boom and bust. there was generally lower penetration of nonprime loans into our housing markets, and in general, our region shows better performance, with fewer delinquencies and foreclosures. this pattern was particularly true across upstate new york. however, as can be seen on the new york fed ’ s u. s. credit conditions maps, there are significant pockets of housing distress around the greater new york city metro area, especially in communities in the bronx,