, business closures, and job losses created tremendous hardships for many americans, and was especially devastating for communities of color. we know that people of color, and black people in particular, experienced higher rates of illness and death. 1 significant representation in essential services work — jobs that required close contact with others — contributed in part to these tragic outcomes. 2 over the past 18 months, we learned how these issues played out for families through regular conversations with community leaders in our district and beyond. separately, our research shone a spotlight on many of these painful realities. for example, a team of new york fed economists published a series earlier this year aimed at understanding the gap in covid - 19 intensity by race and by income. 3 and last month, they shared their findings around racial differences in icu stress during the third wave of covid - 19. 4 1 / 2 bis central bankers'speeches there ’ s no single or simple solution that can fully address these problems. but, as a nation we can build a stronger foundation so that everyone can fulfill their economic potential, thus better enabling the federal reserve to fulfill its mandate. that ’ s why at the new york fed — and across the federal reserve system — a key area of focus is to better understand economic drivers of health and wellbeing, and to champion promising solutions. we are able to do this in large part through our community development efforts to better understand the needs and issues of low - and moderate - income communities throughout our district. our community development team recently adopted a new strategy to concentrate on three key areas : health, household income, and climate. 5 our aim is to connect people, programs, and proposals — especially those focused on fostering racial equity — with the funding needed to promote equitable growth and tackle economic inequality. we are already doing important work in this space and there is so much planned for the future. a few months ago, we brought together mental health and policy experts to examine the pandemic ’ s impact on mental health in communities of color, including the correlation between depression, anxiety, and economic factors such as lost income. 6 and next week, we ’ ll be hosting an event in collaboration with new york university ’ s rory meyers college of nursing, the new york city department of health and mental hygiene, the low income investment fund, and the robert wood johnson foundation to discuss the need for investments in maternal and child health. 7 our goal for convening this coalition of thought and civic

and directors and its relationship “ to public confidence. ” 11 part of the role of supervisors is to close gaps in the rules to advance safe and sound banking practices that support the sustained provision of financial services. issues like misconduct risk and culture likely fall in these gaps because they involve the attitudes, norms, and behaviors and suggest a critical role for supervisors in addressing these risks. conclusion to conclude, misconduct risk poses clear threats to both prudential and financial stability objectives. the work supervisors do to address misconduct challenges is critical because there are limits to the regulatory or deterrence and enforcement approach. to understand how a firm manages misconduct risk and to improve resiliency and reduce the potential for unwanted disruptions to financial intermediation, we must increase our focus on firms ’ decision - making practices and behaviors as a core aspect of good governance. we can draw from the growing literature about the root causes of misconduct and the underlying factors that drive unhealthy cultures to support this goal. however, as i am sure you already appreciate, addressing culture reform across an entire industry is a complex challenge and there is no one action or approach that will fully address it. we all must be willing to work at this from our various vantage points, as supervisors, as academics, and as industry participants. as you reflect on the conversations you have had today, the points that were raised, and the potential paths forward, i encourage you to consider the important role you each play and the potential impact we, collectively, can have by working together toward the ultimate goal of ensuring a safe and sound financial system that supports economic growth and stability. 4 / 5 bis central bankers'speeches 1 these remarks are based on a whitepaper : misconduct risk, culture, and supervision. i thank stephanie chaly, jim hennessy, and jackie mccormack for help preparing these remarks. 2 gavin finch, “ world ’ s biggest banks fined $ 321 billion since financial crisis, ” bloomberg ( march 2, 2017 ). 3 gallup, confidence in institutions, in depth : topics a to z ( june 1 - 5, 2016 ). 4 banking act of 1933, pub. l. 73 – 66, 48. stat. 162, section 30. 5 the term “ cultural capital ” has been defined differently in other contexts — i. e., defined as those symbols, skills and tastes a person acquires overtime from parents, institutions and surroundings that can be used as resources to achieve mobility in a stratified society. see