spiral into a broader financial setback. financial security in retirement a key component of middle - class financial security is the cushion of savings to cover retirement. here, the dfas suggest some progress. one of the innovations of the dfas is that they include defined benefit plans from the financial accounts in addition to defined contribution plans, whereas measures of household pension wealth in the scf are confined to the latter. the balances in defined contribution plans, such as 401 ( k ) s, in which retirement savings accumulate in an account, are typically simpler to measure. by this statistic and the rest in this subsection are from the 2018 shed and are only for middle - income adults. the shed collects ranges of family income, not a dollar amount. middle income is defined as the ranges of family income from $ 40, 000 to $ 99, 000, which is roughly the 40th to 70th percentiles. - 7contrast, the value of defined benefit plans requires estimating how much the future fixed payments each year in retirement are worth today. these future payments are a sizable asset for households, currently estimated at about $ 15 trillion, or about 70 percent of total pension assets. 11 the dfas indicate that the average pension wealth for middle - income households — including both types of plans — has increased 2. 5 percent per year over the past three decades ( figure 6 ). pension assets are now the largest asset held by middleincome households, representing 40 percent of their wealth, substantially exceeding the 22 percent share of home equity in their wealth. in part, the growth in pension balances reflects the sustained decrease in longterm interest rates over this period, which has boosted the value of the future fixed payments associated with defined benefit pensions. it reflects the aging of the population, since households near or in retirement age have the largest accumulated levels of pension savings and are also likely hold a relatively greater share of defined benefit plans ( figure 7 ). how do we square the growth in pension assets with survey evidence indicating that many households in the middle of the income distribution are concerned that they will not have enough to live on in retirement? only 35 percent of middle - income adults, who are not retired, say that their retirement saving is on track, and 16 percent of middle - see board of governors of the federal reserve system, statistical release z. 1, “ financial accounts of the united states, ” table l. 117, https : / / www. federalres

blur the lines between banks and nonbanks. for example, we can expect mutual funds to refine their offerings to compete with bank checking and savings accounts, albeit without deposit insurance. banks will undoubtedly make further inroads in mutual fund management and investment banking through internal growth and through acquisitions of securities firms. investment banks may also supplement their services by making commercial loans and participating in loan syndications. with such things happening, why do we need a legislative solution? the answer is that a well thought out proposal addressing the appropriate structure for the industry would allow for a more rapid and efficient integration of financial services. moreover, by clearly defining the boundaries and structure of financial conglomerates, a well - considered supervisory program could adequately protect banks without undue intrusion to other parts of the conglomerate. because financial conglomerates generally operate as integrated entities and manage risks on a global basis across business lines, their true operating structure superimposes a risk management and internal control process that extends across legal - entity - based corporate structures. in this light, supervision by legal entity can create important supervisory gaps that may expose the insured depository institution to unnecessary risk. that is to say, someone should look at the risk management of the organization as an organic whole, rather than as separate pieces that are simply added together. in fact, comprehensive, consolidated supervision by the home country supervisor is a legal requirement for foreign banks operating in the u. s. some foreign supervisors are now beginning to question the consolidated supervision of u. s. firms operating in their countries. now, i suspect some nonbank firms may feel apprehension at having an umbrella supervisor evaluate their operations. but let me emphasize that such oversight need not be overly onerous or intrusive. in fact, regulators are probably better prepared than ever before to implement an umbrella supervisory approach as a result of the supervisory techniques and approaches i just discussed. by applying risk - focused supervision, and promoting sound practices, and improved market disclosures, an umbrella supervisor should be able to implement an effective, unintrusive oversight process for conglomerates. moreover, an umbrella supervisor may be able to provide assurances and information to other regulators and individual supervisors which may minimize their need to extend their reviews beyond the legal supervised entity and into the conglomerate ’ s other operations, creating duplication and burden. i believe that the umbrella supervisor, whether it is the central bank or another agency, should not attempt to duplicate efforts of other regulators. rather, the umbrella supervisor should evaluate the financial