scenarios posit effects on business operations over much broader geographic areas than previously imagined ( such as a city or a metropolitan area ) and involve consequences that could harm or significantly disperse an organization's critical employees. institutions are also exploring methods to provide a greater diversity of telecommunications services and to eliminate points of failure. contract provisions and audit oversight of telecommunications vendors may heighten attention to this critical vulnerability. at the same time, many recognize that overcoming telecommunications vulnerabilities will be extremely difficult given the current physical infrastructure. in the longer term, establishing diverse telecommunications methods ( such as internet and wireless ) and moving toward wider geographic diversification of operations may address these vulnerabilities. industrywide discussions with telecommunications providers may help institutions to avoid some of the vulnerabilities exposed on september 11. some institutions are reexamining arrangements with disaster - recovery vendors because they have found that these vendors'" first - come, first - served " policies mean just that. testing of backup plans is also receiving renewed focus. testing is seen no longer as a compliance issue or an item on a checklist but as a critical part of business operations. in the wake of september 11, many market participants found themselves operating from their backup sites and discovered they had problems connecting and communicating with the backup sites of other displaced entities. as a result, financial institutions now seem receptive to coordinated testing between backup facilities. in addition, several public and private - sector initiatives have begun to examine the issue of coordinated crisis management communication. overall, i believe that financial institutions are addressing many of the key vulnerabilities. in large part, the market will demand this. customers increasingly require assurances that their financial institutions'operations will continue as expected even in the event of a disaster. we need to maintain our focus on this issue even as the harsh memories of september 11 fade. we must also find ways to make business - continuity planning more consistent, more coordinated, and more transparent across the industry. with that in mind, i will discuss some of the steps that regulators are taking. steps regulators are taking the federal reserve and other financial services regulators want these lessons to be addressed before the next disaster, whenever and whatever it may strike. first, we are talking to our industry colleagues about appropriate sound practices. however, i would stress that we still have a lot to learn from financial institutions and from experts in business - continuity planning. no one knows for certain which threats ( both man - made and natural ) we are most likely

. edt ( 8 : 00 a. m. mdt ) august 23, 2019 figure 1. era 1 : 1950−82 a. real gdp growth quarterly b. unemployment rate quarterly percent percent −5 1950 1956 1962 1968 1974 1980 1950 1956 1962 1968 1974 1980 c. pce inflation d. federal funds rate quarterly quarterly percent percent overall core −2 1950 1956 1962 1968 1974 1980 1950 1956 1962 1968 1974 1980 note : unemployment and federal funds data are quarterly averages ; overall personal consumption expenditures ( pce ) are the four−quarter change in the pce price index ; core pce is the four−quarter change in the pce price index less food and energy ; real gross domestic product ( gdp ) growth is the four−quarter change in the level of real gdp ; federal funds data start in july 1954 ; core pce data start in january 1960 ; all data extend through 1982 : q4. shaded bars indicate periods of business recession as defined by the national bureau of economic research. source : for overall pce, core pce, and real gdp growth, the bureau of economic analysis ; for the unemployment rate, bureau of labor statistics ; for the federal funds rate, board of governors of the federal reserve system ; all series retrieved from the federal reserve bank of st. louis, fred. figure 2. eras 2 and 3 : 1983−2009 and 2010−present a. real gdp growth b. unemployment rate quarterly quarterly percent percent −5 c. pce inflation d. federal funds rate quarterly quarterly percent percent overall core −2 note : unemployment and federal funds data are quarterly averages ; overall personal consumption expenditures ( pce ) are the four−quarter change in the pce price index ; core pce is the four−quarter change in the pce price index less food and energy ; real gross domestic product ( gdp ) growth is the four−quarter change in the level of real gdp ; all data extend through 2019 : q2. shaded bars indicate periods of business recession as defined by the national bureau of economic research. source : for overall pce, core pce, and real gdp growth, the u. s. bureau of economic analysis ; for the unemployment rate, bureau of labor statistics ; for the federal funds rate, board of governors of the federal reserve system ; all series retrieved from the federal reserve bank of st. louis, fred. figure 3. real−time estimates of r * and u * fomc