each institution and that those risk systems operate effectively. thus, we expect that non - basel ii banks can continue to have camels 1 and 2 ratings as long as they operate in a safe and sound manner. note that basel i and basel ii are not the only capital regulations under which u. s. institutions will operate. more than a decade ago, the congress, as part of the federal deposit insurance corporation improvement act's prompt - corrective - action ( pca ) regime, defined a critically undercapitalized insured depository institution by reference to a minimum tangible - equity - to - asset requirement - a leverage ratio. the agencies have also used leverage ratios to define other pca capital categories because experience has suggested that there is no substitute for an adequate equity - to - asset ratio, especially for entities that face the moral hazard that accompanies the federal safety net. the federal deposit insurance corporation, which is responsible to the congress for the management of the critical deposit - insurance portion of the safety net, has underlined the importance of that minimum leverage ratio and pca as part of a prudent supervisory regime. the federal reserve concurs with the fdic's view. as i have mentioned, we need the risk - measurement and risk - management infrastructure and the risk sensitivity of basel ii ; but we also need the supplementary assurance of a minimum equity base. meanwhile, even if supervisors did not call for a minimum leverage ratio, i firmly believe that bankers, investors, and rating agencies would demand it. this leverage ratio would be the same under the amended basel i framework as it would be under the basel ii framework. conclusion in conclusion, i would like to say again that we at the federal reserve believe that small banking organizations provide a valuable service to our financial markets and our economy. we also understand the depth and complexity of the issues that banks face today, from capital to credit risk to compliance issues, and we acknowledge that in some cases these issues are particularly challenging for smaller financial institutions. 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.

too low, the fed and other central banks have less room to cut rates to support the economy during downturns. so, in this review, we are examining strategies that might better allow us to symmetrically and sustainably achieve 2 percent inflation. doing so would help prevent inflation expectations among consumers, businesses, and investors from slipping too low, as they appear to have done in several advanced economies. more - firmly anchored expectations, in a virtuous circle, would help keep actual inflation around our target, thus preserving our ability to change interest rates as appropriate to meet our mandate. we are also looking at whether our existing monetary policy tools will be adequate when the next downturn comes. finally, we are asking whether our communications practices can be improved to better support the effectiveness of our policy. after today, we have one fed listens session remaining, later this month in chicago. at the july meeting of the federal open market committee, my colleagues and i began discussing what we have learned so far from the fed listens events. we continued that discussion at our september meeting and have a lot left to do. we plan to publicly report our conclusions during the first half of next year. one clear takeaway of the sessions so far is the importance of sustaining this historically strong 1 / 2 bis central bankers'speeches job market. people from low - and moderate - income communities tell us that this long recovery, now in its 11th year, is benefiting them and their neighbors to a degree that has not been felt for many years. employers are partnering with community colleges and nonprofit organizations to offer training. and people who have struggled to stay in the workforce in the past are getting new opportunities. once again, i ’ m happy to be here. now it is your turn to speak. we ’ re listening. 2 / 2 bis central bankers'speeches