for release on delivery 9 : 15 a. m. edt may 18, 2018 keeping community at the heart of the community reinvestment act remarks by lael brainard member board of governors of the federal reserve system at the association of neighborhood and housing development eighth annual community development conference build. community. power new york, new york may 18, 2018 i want to thank ben dulchin and the association of neighborhood and housing development ( anhd ) for inviting me to be here with you today. while new york is known globally as a cultural hub that attracts the world to its doorstep, it is known locally as a city of neighborhoods. like other cities across this country, new york ’ s future is bound to the vitality of its neighborhoods as places to live, work, learn, play, worship, and invest. 1 neighborhoods have been the focus of anhd ’ s work for over 40 years. the organization ’ s success is a function of its unwavering focus on preserving and strengthening the quality of life in low - and moderate - income neighborhoods across the five boroughs. the mission of each of the members of anhd is to strengthen these communities. together, your organizations are providing capacity building, advocacy, and services for the benefit of your communities and the city as a whole. like many of the nation ’ s metropolitan areas, new york city has rebounded since the recession and is thriving. 2 that, however, has not been the experience for many. many of the city ’ s residents have not fully recovered, and some have fallen further behind. here, as elsewhere in the country, there remain important gaps in economic opportunity. powerful research now demonstrates that persistent gaps in economic opportunity are connected to the health of neighborhoods. the effects of place on opportunity can stretch from one generation to the next. raj chetty and others have shown that upward mobility can vary immensely by neighborhood even within the same metropolitan area. the longer a child lives in i am grateful to theresa stark of the federal reserve board for her assistance in preparing these remarks. the remarks represent my own views, which do not necessarily represent those of the federal reserve board or the federal open market committee. according to the most recent report by the new york city comptroller, the city ’ s gdp grew 2. 7 percent in the first quarter of 2018 as compared to 2. 3 percent for the nation, and the unemployment rate for the city fell to 4. 3 percent, the lowest rate on record. see “

episodes of pressure on u. s. corporate bond prices over the period from 1998 to 2005 ; these episodes include, among others, the russian and long - term capital management crisis of 1998, the 2002 surge in corporate defaults and bankruptcies, and growing concerns about u. s. auto companies in 2005. in addition, while stock prices in some emerging market countries have not performed well, a broad aggregate for these markets shows stock prices up over the past year, while the advanced economy indexes have exhibited double - digit declines, on average. 13 certainly, stock prices in the emerging market economies moved downward during acute periods of u. s. financial stress over the past year. however, these movements were similar in scale to those seen in industrial country equity markets, and during the intervening periods when global pressures were less intense, the prices of emerging market equities rebounded more substantially than those of industrial countries. reconciling apparent decoupling with integration how do we reconcile the obvious expansion of international trade, labor, and financial flows with the evidence, albeit mixed, of decoupling in the recent period? three different points can help us achieve this reconciliation. the first point is purely conceptual. the conventional wisdom is that greater international trade leads demand shocks to reverberate more intensely across international markets. however, we need to recognize that economic theory does not predict that greater economic and financial integration will necessarily result in increased co - movement of output across nations. one way in which integration might lead to less synchronization is through the tendency of international trade to promote specialization of production. if economies become more specialized, then their economic growth, and even equity markets, may be driven more by developments that are specific to the industries that have taken root in each country. 14 stock price calculations are based on msci indexes for all emerging market economies and on the “ world index ” for non - emerging - market economies. catao and timmermann ( 2004 ). the authors identify high and low volatility states over the past 30 years. they find that the country factor contribution drops markedly when global equity market volatility rises, and that country - return correlations become tighter when global and industry factors are both in a high - volatility state. the second point in this reconciliation stems from the observation that the correlation of business cycles will be specific to the shocks driving the cycles. in 2001 and 2002, the sharp decline in growth in the foreign countries soon after the