with the elements of the federal safety net - - including deposit insurance and access to the discount window and the payment system - that differentiate banks from nonbanks in the united states. the safety net, which is provided at taxpayer expense, obligates supervisors to develop approaches that they believe are prudent for the banks that benefit from that safety net. a second aspect of the competitive equity issue involves domestic competition among banks - - what would be the competitive effect of altering the regulatory capital rules for the largest and most complex banks while keeping the existing framework for most other banks? my perception is that pricing, and thus competition, between large and smaller banks today is relatively little influenced by regulatory capital constraints because banks are operating far above regulatory minimum levels, or because economic capital and not regulatory capital is the binding constraint, or because banks are capable of easily selling or securitizing the exposure, as is the case with the majority of residential mortgage loans. moreover, the ultimate check on the possibility of competitive distortion is that any bank that makes the investment in risk management technology necessary to meet the basel ii standards will be able to adopt the advanced irb approach. i hope that it goes without saying that in proposing to implement basel ii as we have outlined, we are not seeking or expecting to induce material shifts in the competitive banking landscape in the united states. nevertheless, if some institutions believe that these proposals will have such an effect, we want them to use the anpr comment process to enable us to understand and evaluate the rationale for those views and whether modifications to the basel ii proposals, or the way we intend to implement them, are appropriate in response. another important aspect of the competitive equity issue is competition among the subset of banks covered by the basel ii approaches, particularly the more advanced approaches. as a result of relying on inputs generated by systems at individual banks, there will inherently be variations across these banks in how such systems treat the same transactions and exposures. a certain amount of such variation is clearly a necessary byproduct of the need to provide the flexibility to make use of internally generated data. but there is also a strong policy interest in ensuring comparability across banks, as i have already discussed. this policy interest is one reason why it is desirable to establish minimum qualifying criteria for the use of approaches that rely on internally generated data, whether they might be the advanced irb approach for credit risk or the advanced measurement approach ( ama ) for operational risk. on the other hand,

unemployment rates for prime - age african americans and hispanics and their white counterparts began to close. in fact, disparities in labor market outcomes just prior to the onset of the pandemic were the narrowest in at least 50 years. at the same time, inflation remained low - lower, in fact, than our 2 percent target for most of that time - and showed little sign of picking up despite the strong labor market. unfortunately, the pandemic brought about the most rapid and severe labor market contraction of the past 80 years. it also had a noticeably larger effect on the unemployment rates of women and of black and hispanic individuals than it did on 1 / 3 bis - central bankers'speeches most other demographic groups. and while job losses were widespread across all sectors of the economy, workers with less education were particularly hard hit. this was especially true for those unable to work remotely or in jobs that required in - person interactions. as the economy reopened and began to recover, unemployment rates for those groups initially affected the most - black and hispanic workers - also fell more sharply. today, while material disparities in unemployment rates along racial lines persist, these disparities have almost returned to the narrower ranges we saw just before the pandemic. however, as the economy has recovered, strong demand and a variety of supply constraints have contributed to the fastest increases in consumer prices since the early 1980s. inflation, too, has disproportionate effects on, and is felt most acutely by, those who can least afford it. price increases have been particularly sharp for necessities like food, transportation, and shelter, which make up a substantial portion of household budgets for people on the lower end of the pay scale. lower - income households also have less in savings to buffer price increases, meaning that they not only feel the effects more forcefully, but they also feel them immediately. the savings they do have are more likely to be in cash or noninterest - bearing accounts, which means inflation directly erodes the purchasing power of their savings. monetary policy cannot address the specific reasons that low - income households suffer the most from high inflation. but these reasons help to illustrate the importance of low inflation : low inflation is key to achieving a long and sustained expansion - an economy that works for all. pursuing our dual mandate is the best way for the federal reserve to promote widely shared prosperity. at the same time, it is critical for monetary policymakers to understand the many and