, “ bail - in in the new bank resolution framework : is there an issue with the middle class? ”, speech at the iadi - erc international conference “ resolution and deposit guarantee schemes in europe : incomplete processes and uncertain outcomes ”, naples, 23 march. 12 restoy, f. ( 2018 ), op. cit. 13 geithner, t. ( 2016 ), op. cit. 14 smaghi, b. ( 2018 ), financial times op - ed “ european banking union needs its final leg ”, 21 october 2017. 15 carmassi, j., dobkowitz, s., evrard, j., parisi, l., silva, a., wedow, m. ( 2018 ), “ completing the banking union with a european deposit insurance scheme : who is afraid of cross - subsidisation? ”, ecb occasional paper 208, april. 16 demetriades, p. ( 2017 ), “ a diary of the euro crisis in cyprus : lessons for bank recovery and resolution ”, palgrave macmilan : cham switzerland. 17 restoy, f. ( 2018 ), op. cit. 6 / 7 bis central bankers'speeches 18 constancio, v. ( 2018 ), “ completing the odyssean journey of the european monetary union ”, remarks at the ecb colloquium on “ the future of central banking ”, frankfurt am main 16 – 17 may. in fact, the establishment of banking union was inspired by the american fdic. however, it fell short of providing the srf or edis with the right instruments and means to guarantee financial stability. 19 bernanke, b. ( 2018 ), “ the real effects of disrupted credit : evidence from the global financial crisis ”, per jacobsson lecture, bis annual general meeting, basel, 24 june. 20 geithner, t. ( 2016 ), op. cit. 21 bernard, b., capponi, a, and stiglitz, j. ( 2017 ), “ bail - ins and bailouts : incentives, connectivity, and systemic stability ”, voxeu. org, 18 october. 7 / 7 bis central bankers'speeches

lots of resources are left unused. but the biggest and most disturbing answer is our fellow americans. there are many productive people in the united states available to work more hours, and our society is deprived of their production. this key point is generally underappreciated. i ’ ve said that the fomc is undershooting its price stability objective and is expected to continue to do so. but we should all keep in mind that this outcome – and especially the forecast for continued undershooting – typically means that the fomc is also underperforming on its other objective of promoting maximum employment. maximum employment i ’ ve argued that the low inflation rate is a signal that the fomc is underperforming with respect to its maximum employment objective. but we don ’ t need to rely on this signal to reach this conclusion. we can readily see this underperformance in numerous key metrics of labor market performance. i ’ ll begin by showing you data on the evolution of the unemployment rate. in march 2007, the unemployment rate was 4. 4 percent. it rose slowly throughout 2007 to reach 5 percent by the end of the year. the national bureau of economic research dates the great recession as having begun in that month. in the wake of the recession, the unemployment rate reached a peak of 10 percent in october 2009. since that date – over four years ago! – the unemployment rate has fallen slowly to 6. 7 percent. this is still unusually high relative to the past quarter century or so. the current unemployment rate is also high relative to most forecasts of its expected long - run level. personally, i expect that, over the long run, the unemployment rate will converge to just over 5 percent. basically, an unemployment rate of 6. 7 percent means that the u. s. labor market is far from healthy. bis central bankers ’ speeches but i would say that this measure – troubling as it is – could well overstate the degree of improvement in the u. s. labor market. to estimate the unemployment rate, the census bureau asks people two questions : are you working? and, if not, have you looked for work in the past four weeks? the unemployment rate measures the ratio of the second number – the recent job searchers – to the sum of the two numbers ( the recent job searchers and the workers ). this means that the unemployment rate can decline for two reasons : because more people are finding work or because