, by themselves, are unlikely to induce substantial further investment, for example, in the long - haul fiber network. however, it would be a mistake to focus on only one channel of monetary influence, such as the impact that policy might have on the demand for high - tech equipment. monetary policy works on a wide variety of spending, including housing, consumption expenditures, and net exports, and the channels through which policy works range broadly across the financial markets. just as in the past, an easing of policy is likely, over time, to provide impetus to growth of demand in the aggregate, even if it does not immediately lift the prospects of the hardpressed firms in some high - tech industries. nonetheless, despite our aggressive easing actions of the first half of this year, i believe that it is too early to say definitively that the current period of subpar growth has ended. given the likely magnitude of the capital goods adjustment that i have just discussed, as well as other forces, i expect only a gradual pick - up in the rate of growth later this year. against that background, i continue to believe that the balance of risks seems to be toward continuing weakness in the economy. conclusion in sum, although it is difficult to determine how large the overhangs of capital might be at present, they seem likely to exert at least a modest amount of drag on the economy over the near term, even as growth picks up. over time, though, the discrepancy between actual and desired stocks of capital will be worked off, both as actual holdings diminish through depreciation, and as target holdings increase with the revival of aggregate demand. the overhang does not require that we alter our basic approach to monetary policy : we still maintain the ultimate objectives of price stability and maximum sustainable employment. mainly, the overhang factors into our thinking through the risk it might pose to the intermediate - term outlook for economic activity and employment. over the long term, the current problems almost surely will be resolved in the ways that markets have solved past problems of capital misallocation : investments that no longer seem likely to earn the profits that had been expected will be written off, at the same time that capital is being reallocated toward emerging opportunities. overall, i remain cautiously optimistic about the long - run prospects for investment in new technologies, and for the beneficial implications that will have for the u. s. and world economies.

in its stages of implementation, how the institution assesses and manages risk, and relevant information for third parties to ascertain the effectiveness of the bank's risk 2 / 4 management. pillar 3 market discipline, therefore, will complement supervisory efforts to maintain adequate capital. so where do we go from here? the u. s. agencies learned some valuable information from the follow - up work pertaining to qis4 results this summer. right now we are still evaluating the results from this follow - up work, discussing the options to respond to those findings, and determining how the implementation process will proceed in the united states. obviously, we understand that the industry and others are interested in details about the next steps in the united states, and we hope to provide a public communication sometime in october. additionally, the agencies are moving forward on an advanced notice of proposed rulemaking for revisions to basel i rules, the details of which should be publicly available very soon. we expect that the timeframe to adopt revisions to current rules will overlap with the basel ii proposals, so that the industry can review them side - by - side. progress on home - host issues with such a large group of international bankers in attendance, i would be remiss in not offering a few thoughts on home - host issues relating to basel ii implementation. understandably, internationally active banks are keenly interested in cooperative arrangements among supervisors for evaluating capital adequacy under basel ii. several years ago, the accord implementation group ( aig ) was formed as a subcommittee of the basel committee for supervisors to discuss the tactical issues associated with cross - border supervision. most recently, and in cooperation with the representatives of the core principles liaison group ( non - group of ten supervisors ), a joint working group was established to consider enhancing guidelines for information sharing among home and host supervisors. this working group is looking to clarify the roles and responsibilities of home and host supervisors as well as supervisory expectations of banks with regard to communications between their head office and their foreign offices. the working group is also hoping to address communications between home and host supervisors about enterprise - wide risk models and their use in assessing capital adequacy in host jurisdictions, as well as mechanisms for supervisors to work together for consistency and to avoid duplication. obviously, whatever guidance is issued would be supplemented further as implementation plans and qualification processes become more fully developed. i do think it is also helpful to remember that a number of the home - host issues pertaining to basel ii are actually