available on the board's web site. recently the board has focused on helping consumers understand nontraditional mortgage products and arms. for example, the board recently published a consumer education brochure ( interest - only mortgage payments and payment – option arms – are they for you? ) on interest - only mortgages and payment - option arms. this brochure describes the loan terms and risks inherent in such products and alerts borrowers to possible future payment increases. the board's revised consumer handbook on adjustable rate mortgages, which creditors must provide with every arm application, also seeks to educate consumers about the features and risks of nontraditional mortgage products. the federal reserve ’ s community affairs program the federal reserve's community affairs program supports the board's objective of promoting community development and fair and impartial access to credit by focusing on low - and moderateincome consumers. we develop programs and build partnerships with organizations to help bring consumers into the financial and economic mainstream. the community affairs function within the board and the reserve banks complements other regulatory and compliance activities with programs that educate and equip low - and moderate - income consumers with the tools they need to make better choices in establishing credit and building assets. the reserve banks'community affairs programs are specifically focused on improving understanding about low - and moderate - income consumers'needs for and access to financial services. toward this end, the reserve banks engage in research that explores issues relating to consumers'use of financial services products and services. in addition, the community affairs offices convene a research conference every two years dedicated to generating and presenting research that explores current trends in financial services and the implications for lower - income consumers. for example, the most recent conference held this past march in washington, d. c., offered research on predatory lending and payday lending. the federal reserve banks also collaborate with local and regional partners to explore opportunities to create awareness of and solutions to address concerns about financial services issues as they relate to lower - income consumers and communities. several reserve banks have spearheaded initiatives to respond to concerns about rising mortgage defaults and delinquencies, with the san francisco federal reserve bank holding forums in six cities to discuss community responses. others federal reserve banks have worked with nonprofit organizations and local governments to develop strategies to improve lower - income consumers'wealth - building opportunities, such as initiatives promoting savings and accessing tax credits. all twelve community affairs offices have initiatives to promote and support consumer financial education. the

available technology for achieving both sets of policy objectives. misconception # 3 : inflation targeting is inconsistent with the central bank's obligation to maintain financial stability. let me address this point in the context of the united states. the most important single reason for the founding of the federal reserve was the desire of the congress to increase the stability of american financial markets, and the fed continues to regard ensuring financial stability as a critical responsibility. ( by the way, this is a reason to be nervous about the recent trend of separating central banking and financial supervision ; i hope we have the sense not to do that here. ) i have always taken it to be a bedrock principle that when the stability or very functioning of financial markets is threatened, as during the october 1987 stock market crash or the september 11 terrorist attacks, that the federal reserve would take a leadership role in protecting the integrity of the system. i see no conflict between that role and inflation targeting ( indeed, inflation targeting seems to require the preservation of financial stability as part of preserving macroeconomic stability ), and i have never heard a proponent of inflation targeting argue otherwise. inflation targeting and the federal reserve as i noted earlier, the federal reserve, though rejecting any explicit affiliation with inflation targeting, has been influenced by many of the same ideas that have influenced self - described inflation targeters. increasingly greater transparency and more forward - looking, proactive policy are two examples of convergence in practice between the fed and inflation - targeting central banks, and i think most would agree that both of these developments have been positive and have led to better outcomes. most important, however, as i discussed in the earlier speech, under chairman volcker and chairman greenspan, the fed has moved gradually toward a policy framework of constrained discretion. in king ( 1997 ) appears to be the source of the phrase. svensson ( 1999 ), who i believe coined the phrase “ strict inflation targeting ”, calls this point “ uncontroversial. ” svensson ’ s paper and his related work also show in detail the consistency of inflation targeting with a dual mandate. a number of inflation - targeting central banks refer to inflation stabilization as the central bank ’ s “ primary long - run objective. ” at one level, this statement does not have much content because inflation is the only variable that central banks can control in the long run. its real import is to say that the central bank is responsible for long - run price stability, a statement that should be unobjectionable in