a set of aggregate integrated financial accounts that measures sources and uses of funds for major sectors as well as for the economy as a whole. 10 these accounts allow us to trace the flow of credit from its sources, such as banks or wholesale funding markets, to the household and business sectors that receive it. the federal reserve also now monitors detailed consumer - and business - level data suited for picking up changes in the nature of borrowing and lending, as well as for tracking financial conditions of those most exposed to a cyclical downturn or a reversal of fortunes. for example, during the housing boom, the aggregate data accurately showed the outsized pace of home mortgage borrowing, but it could not reveal the pervasive deterioration in underwriting that implied a substantial increase in the underlying credit risk from that activity. 11 more recently, gains in household net worth have been concentrated among wealthier households, while many households in the middle or lower parts of the distribution have experienced declines in wealth since the crisis. moreover, many homeowners remain “ underwater, ” with their homes worth less than the principal balances on their mortgages. thus, more detailed information clarifies that many households remain more financially fragile than might be inferred from the aggregate statistics alone. conclusion in closing, let me reiterate that while the effective regulation and supervision of individual financial institutions will always be crucial to ensuring a well - functioning financial system, the federal reserve is moving toward a more systemic approach that also pays close attention to the vulnerabilities of the financial system as a whole. toward that end, we are pursuing an active program of financial monitoring, supported by expanded research and data collection, often undertaken in conjunction with other u. s. financial regulatory agencies. our stepped - up monitoring and analysis is already providing important information for the board and the federal open market committee as well as for the broader regulatory community. we will continue to work toward improving our ability to detect and address vulnerabilities in our financial system. vol. 7 ( december ), pp. 189 – 240 ; and rochelle m. edge and ralf r. meisenzahl ( 2011 ), “ the unreliability of credit - to - gdp ratio gaps in real time : implications for countercyclical capital buffers, ” international journal of central banking, vol. 7 ( december ), pp. 261 – 98. the flow of funds data are available on the federal reserve board ’ s website. see matthew j. e

janet l yellen : remarks accepting the 2017 paul h douglas award for ethics in government speech by ms janet l yellen, chair of the board of governors of the federal reserve system, at the institute of government and public affairs at the university of illinois, washington dc, 7 november 2017. * * * thank you for the honor of sharing this award with such a worthy person, my friend and former colleague ben bernanke, and also for the honor of being associated with the exemplary life and legacy of paul douglas. sen. douglas ’ s contributions to ethics in government are an important aspect of that legacy, but since ben and i are the first economists to win this award, i would also like to give due credit to professor douglas for his contributions to economics. working with the mathematician charles cobb, douglas gathered data and created a statistical model that advanced economists ’ understanding of the relative contributions to production made by capital and labor. this work demonstrated many of the methods that economists would come to use and continue to use to this day. douglas constructed empirical measures of key economic concepts. he then employed what were, for the time, advanced statistical techniques to analyze these data, thereby shedding light on a basic economic relationship. as one recent commentator put it, work such as douglas ’ s was part of “ a growing literature,,, [ that ] played an important role in shaping the approach to combining statistical methods and economic theory that would become the standard econometric practice in the later decades of the 20th century. " 1 but, of course, paul douglas was much more than an economist. from an early age, he always seemed to be the man in the middle, seen by the two sides of a dispute as intelligent, knowledgeable, and impartial enough to be trusted to seek a solution. he mediated labor disputes and advised local government officials in illinois. he also helped governors in pennsylvania and new york develop what became social security, unemployment insurance, and the idea of publicly owned power utilities. after losing his first election for the u. s. senate in 1942, at the age of 49 he enlisted in the u. s. marines and was awarded a bronze star and purple heart for his service in the pacific. later, after he was elected to the senate, douglas was a champion of consumer protection laws, including the 1968 truth in lending act, and was a leading supporter of civil rights legislation. one of paul douglas ’ s most important achievements in public life was to promote ethics in government