that i know about sociology. 5. since i have covered what i know about sociology, i might as well say something about political science as well. in regard to politics, i have always liked lily tomlin ’ s line, in paraphrase : “ i try to be cynical, but i just can ’ t keep up. ” we all feel that way sometime. actually, having been in washington now for almost 11 years, as i mentioned, i feel that way quite a bit. ultimately, though, cynicism is a poor substitute for critical thought and constructive action. sure, interests and money and ideology all matter, as you learned in political science. but my experience is that most of our politicians and policymakers are trying to do the right thing, according to their own views and consciences, most of the time. if you think that the bad or indifferent results that too often come out of washington are due to base motives and bad intentions, you are giving politicians and policymakers way too much credit for being effective. honest error in the face of complex and possibly intractable problems is a far more important source of bad results than are bad motives. for bis central bankers ’ speeches these reasons, the greatest forces in washington are ideas, and people prepared to act on those ideas. public service isn ’ t easy. but, in the end, if you are inclined in that direction, it is a worthy and challenging pursuit. 6. having taken a stab at sociology and political science, let me wrap up economics while i ’ m at it. economics is a highly sophisticated field of thought that is superb at explaining to policymakers precisely why the choices they made in the past were wrong. about the future, not so much. however, careful economic analysis does have one important benefit, which is that it can help kill ideas that are completely logically inconsistent or wildly at variance with the data. this insight covers at least 90 percent of proposed economic policies. 7. i ’ m not going to tell you that money doesn ’ t matter, because you wouldn ’ t believe me anyway. in fact, for too many people around the world, money is literally a life - ordeath proposition. but if you are part of the lucky minority with the ability to choose, remember that money is a means, not an end. a career decision based only on money and not on love of the work or a desire to make a difference is a recipe for unhappiness. 8.

less binding on banks as the recovery has gathered strength. thus, losses on loans and positions in the severely adverse scenario among participating banks have declined over time as the economy has strengthened. for example, in the 2016 exercise, losses amounted to $ 526 billion, while in 2017 they had fallen to $ 493 billion, despite a larger increase in the unemployment rate in the scenario. as economic conditions strengthen, typical measures of underwriting quality look strong, delinquencies fall to low levels, and profits rise consistently, all of which could lead to lower projected stress losses. of course, these effects tend to reverse during bad economic conditions : underwriting deficiencies tend to be revealed, delinquencies to rise, and profits to fall. thus, capital requirements based on stress tests alone are unlikely to completely compensate for the financial system ’ s natural pro - cyclicality. in part for that reason, we also have a specifically countercyclical capital requirement that applies to the largest banks. countercyclical capital requirements can lean against a dangerous increase in financial vulnerabilities at a time when the degree of monetary tightening that would be needed to achieve the same goal would be inconsistent with the federal reserve ’ s dual mandate of full 4 / 7 bis central bankers'speeches employment and price stability. the reverse is also true. the countercyclical capital buffer ( ccyb ) is designed to increase the resilience of large banking organizations when there is an elevated risk of above - normal losses, which often follow periods of rapid asset price appreciation or credit growth that are not well supported by underlying economic fundamentals. the ccyb is an additional margin of capital that the nation ’ s largest banks can be asked to build to augment resilience at times of rising cyclical pressures and to release as the economy weakens in order to allow banks to lend more when it is most needed. the ccyb framework, which was finalized in september 2016, requires the federal reserve board to vote at least once per year on the level of the ccyb. put simply, the criterion for raising the ccyb above its minimum value of zero is that financial risks are assessed to be in the upper one - third of their historical distribution. our assessment of financial vulnerabilities is a key input into the federal reserve board ’ s decisions surrounding the setting of the ccyb, along with a variety of other model - based and judgmental criteria. on december 1,