in australia, however, this has not happened ; in particular, household loan arrears remain relatively low ( graph 3 ). contributing to this better outcome in australia was the fact that the deterioration in lending standards was not as severe or as widespread as in some other countries. also, household incomes have continued to grow solidly, in the context of a strong economy and low unemployment. bis central bankers ’ speeches graph 3 banks ’ non - performing housing loans * per cent of outstandings however, within this overall picture of resilience, there are, as always, pockets of housing stress. in the early part of last decade, those pockets were heavily concentrated around the south - west parts of sydney. these problems followed the very strong rises in sydney house prices over 2002 and 2003. they were linked to a sharp rise in loan approvals, some lowering of lending standards, particularly by second - tier lenders, and increased speculative activity. conditions in that region subsequently improved, helped by a period of stable house prices and rising incomes, though the process took a long time and the arrears rate in that part of sydney remains higher than the national average. recently, it has been parts of queensland and western australia that have shown a deterioration in loan arrears, albeit from low levels. as had been the case in sydney earlier in the decade, the recent increase in loan arrears in these states followed a sharp increase in housing loans and unusually strong rises in house prices between 2006 and 2008. some part of this was justified by the emerging resources boom but, as had occurred earlier in sydney, this was accompanied by some lowering of credit standards and increased speculative activity, with the result that some households over - extended themselves. adding to the stress on household finances was the fact that both these states experienced largerthan - average increases in unemployment during the 2009 downturn, though again from relatively low levels. another potential source of vulnerability in the housing market that is often mentioned is the many first - home owners who were attracted into the housing market in 2009 by the increase in the first - home owner grant. the concern is that some of these may have over - committed themselves financially in order to enter the market, and are now vulnerable to rising interest rates. this group bears close watching but, so far at least, first - home owners do not seem to be disproportionately represented in loan arrears. while the household sector as a whole continues to show a good deal of res

edward m gramlich : workplace financial education remarks by mr edward m gramlich, member of the board of governors of the us federal reserve system, at the second meeting of the financial literacy and education commission, washington, dc, 20 may 2004. * * * the federal reserve system has a long history as a promoter and provider of consumer education. an increasingly complex global financial system requires consumers to have a strong working knowledge of financial concepts. to highlight the importance of financial education and to make people aware of the multitude of financial education resources that are available to them, the federal reserve system launched a national public campaign that began in may 2003. but before we launched a public campaign, we began putting together a serious program of workplace education for our own board employees. in november 2002, we sponsored a roundtable with fifteen to twenty employers that we identified as having active workplace education programs. attendees, representing reserve banks, private corporations, and government agencies, discussed goals, plans, and how to get started. this group suggested some key features that we built into our own program. one was to make financial education a lifetime responsibility, for us and our employees. another was to keep information current, relevant, and responsive to changing conditions. a third was to provide information through a range of vehicles. from this session we gathered information on best practices and formed an internal task force to plan, coordinate, and evaluate these efforts. the task force developed ongoing objectives for the program that include • increasing employees ’ understanding of how board - sponsored benefit programs can contribute to short - and long - term financial well - being, • improving employees ’ knowledge of basic financial concepts and improving their capability to make personal finance decisions, • encouraging employees to adopt financial management behaviors that will help them increase their short - and long - term savings and better manage or eliminate debt, and • evaluating the impact of workplace financial education on participation in board benefit programs and financial behavior through appropriate metrics. to carry out our objectives, we use a variety of methods. we host lunch - time seminars, offer morning or afternoon programs, and place articles and educational materials on our internal electronic newsletter. we are also developing an internal web site designed to improve employees ’ knowledge of finance, benefits, health, and career development issues. our programs and educational materials cover a variety of topics. “ making sense of your credit report ” provides information on the factors that can positively or negatively affect a credit report. “ college savings : making education your financial goal ” discusses education as a