increasing technical linkages and interdependence within and across markets. in this type of environment, significant single points of failure within clearing and settlement processes can have far - reaching effects throughout the financial markets. to address these concerns, the regulatory community has adopted a strategy to help reduce systemic risk from regional disruptions to the clearing and settlement infrastructure. this strategy has three broad components : first, prevention ; second, management ; third, testing and assurance. the objective is to reduce the probability that a regional event would bring critical financial markets to a standstill and to ensure the smooth operation of critical infrastructure, if possible. another objective is to allow the most active firms, at a minimum, to wind up transactions, manage the related financial risk, and to resume trading as soon as commercially reasonable. sound practices our recent white paper sets out several sound practices to achieve these objectives. to help prevent and contain the effects of a regional event, financial utilities and critical firms should regionally diversify their back offices and operational sites that support clearing and settlement for critical markets. in particular, primary operations and backup operations need to be significantly more diverse in order to meet the greater regional risks. the old model of having primary and backup operations centers in close proximity so that they can be served by a common labor pool does not address the possibility of a significant threat to an entire region and labor pool. to help manage a regional event, the white paper sets out as a sound practice that financial utilities should plan to recover and fully resume operations on an intraday basis. the paper notes that an emerging sound practice is for these utilities to plan to recover and to resume operations within two hours or less. of course, actual recovery times will depend on circumstances. however, the objective of rapid intraday recovery provides an important focal point for planning and testing by both utilities and their financial institution customers. i should note that the federal reserve ’ s own current recovery objectives for fedwire are much more aggressive than two hours. the paper recognizes clearly that financial firms ’ ability to recover their overall operations is critically dependent on their financial utilities. this means, in general, that the utilities will have to recover and resume operations more quickly than their participants in order to enable those participants and the overall market to recover in an orderly way. many financial institutions are shareholders and board members as well as participants in private - sector utilities. it will be very important for the management of these utilities and their shareholder - participants to work closely to ensure that the recovery and

##everaging has affected the spending and borrowing of many households, there is no doubt that the process has been more acute for those that have experienced unemployment, underemployment, or slower wage gains. to make matters worse, there is also some evidence to suggest that the factors that contributed to the rise in inequality and the stagnation of wages in the bottom half of the income distribution, such as technological change that favors those with a college education and globalization, are still at play in the recovery – and perhaps may have accelerated. 11 about two - thirds of all job losses in the recession were in middle - wage occupations – such as manufacturing, skilled construction, and office administration jobs – but these occupations have accounted for less than one - fourth of subsequent job growth. 12 in contrast, the decline in lower - wage occupations – such as retail sales, food service, and other lower - paying service jobs – accounted for only one - fifth of job loss and more than one - half of total job gains in the recovery. 13 it is not only the occupational and industrial distribution of the new jobs that poses challenges for workers and their families struggling to make ends meet, but also the fact that many of the jobs that have returned are part time or make use of temporary arrangements popularly known as contingent work. the flexibility of these jobs may be beneficial for workers who want or need time to address their family needs. however, workers in these jobs often receive less pay and fewer benefits than traditional full - time or “ permanent ” workers, are much less likely to benefit from the protections of labor and employment laws, and often have no real pathway to upward mobility in the workplace. 14 in contrast to the decrease in overall debt, student loans have continued to rise at a solid pace. the outstanding level of student loan balances is nearly twice its level five years ago and now represents the largest component of consumer ( nonmortgage ) lending. the increase in student loans is likely related to broader developments in the recession and exposes the households holding these loans to new risks. the poverty rate has risen sharply since the onset of the recession, after a decade of relative stability, and it now stands at 15 percent, significantly higher than the average over the past three decades. see carmen denavas - walt, bernadette d. proctor, and jessica c. smith ( 2012 ), income, poverty, and health insurance coverage in the united states : 2011 ( pdf ), u. s. census bureau