economy.... to restore trust, we need a shift toward greater integrity and accountability. we need a stronger and systematic ethical dimension. ” ) ; mark carney, rebuilding trust in global banking, speech at 7th annual thomas d ’ aquino lecture on leadership, ontario, february 25, 2013, ( “ the real economy relies on the financial system. and the financial system depends on trust. indeed, trust is imbedded in the language of finance. the word credit is derived from the latin, credere, which means ‘ to have trust in. ’ ” ) ; dudley, supra n. 1 ( “ unless the financial i see generally onora o ’ neill, a question of trust 15 – 17, 23 – 24, and 43 – 47 ( 2002 ) ( distinguishing trust from trustworthiness ). ndustry can rebuild the public trust, it cannot effectively perform its essential functions. for this reason alone, the industry must do much better. ” ). see generally onora o ’ neill, a question of trust 15 – 17, 23 – 24, and 43 – 47 ( 2002 ) ( distinguishing trust from trustworthiness ). bis central bankers ’ speeches untrustworthy or disloyal, will they choose to work in that firm? and, if they do, how will they behave toward the firm and its stakeholders? i am encouraged that the industry seems to understand the importance of reforming its culture. consider for a moment the following data points. in september 2013, shareholders of a major u. s. bank requested that the bank prepare “ a full report on what the bank has done to end [ its ] unethical activities, to rebuild [ its ] credibility and provide new strong, effective checks and balances within the [ b ] ank. ” that request was forwarded, by the way, by a catholic nun. the bank responded through its attorneys that the nun ’ s proposal was “ materially false and misleading ” and “ impermissibly vague and indefinite. ” 9 fast forward to may 2015. the federal advisory council - a panel of bankers that advises the federal reserve system - reported that “ regulators and the banking industry have worked extensively to restore financial stability through a series of mechanisms and rules that establish appropriate levels of capital, liquidity, and leverage.... as often as not, however, the challenges faced in recent years have been behavioral and cultural ; post - crisis episodes such as libor and foreign

, such as statutory triggers and sunsets on legislation, that would allow the congress to make mid - course corrections more easily if budget projections go off - track - as they invariably will. these ideas are helpful and they could strengthen the basic structure established a decade ago. but, more important, a budget framework along the lines of the one that provided significant and effective discipline in the past needs, in my judgment, to be reinstated without delay. i am concerned that, should the enforcement mechanisms governing the budget process not be restored, the resulting lack of clear direction and constructive goals would allow the inbuilt political bias in favor of growing budget deficits to again become entrenched. we are all too aware that government office of management and budget, budget of the united states government, fiscal year 2004, washington, d. c. : us government printing office, p 32. in general, fiscal systems are presumed stable if the ratio of debt in the hands of the public to nominal gdp ( a proxy for the revenue base ) is itself stable. a rapidly rising ratio of debt to gdp, for example, implies an ever - increasing and possibly accelerating ratio of interest payments to the revenue base. conversely, once debt has fallen to zero, budget surpluses generally require the accumulation of private assets, an undesirable policy in the judgment of many. spending programs and tax preferences can be easy to initiate or expand but extraordinarily difficult to trim or shut down once constituencies develop that have a stake in maintaining the status quo. in the congress ’ s review of the mechanisms governing the budget process, you may want to reconsider whether the statutory limit on the public debt is a useful device. as a matter of arithmetic, the debt ceiling is either redundant or inconsistent with the paths of revenues and outlays you specify when you legislate a budget. in addition, a technical correction in the procedure used to tie indexed benefits and individual income tax brackets to changes in “ the cost of living ” as required by law is long overdue. as you may be aware, the bureau of labor statistics has recently introduced a new price index - the so - called chained cpi. the new index is based on the same underlying data as is the official cpi, but it combines the individual prices in a way that better measures changes in the cost of living. in particular, the chained cpi captures more fully than does the official cpi the way that consumers alter the mix of their expenditures in response to changes