the most precarious rungs of the ladder often feel the impacts of a downturn soonest and the longest. 4 chair yellen brought the subject of economic disparities to the forefront of our conversations, consistently emphasizing the importance of an economy that works for everyone. 5 as chair, janet yellen continued her practice of meeting with community members, where she had in - depth conversations about disparities in employment, labor force participation, income, and wealth, recognizing these direct interactions provide valuable insights no statistic or report can fully capture. for instance, she visited the manufacturing technology center on cuyahoga community college ’ s metropolitan campus where she participated in a roundtable discussion on the state of manufacturing workforce development in northeast ohio. 6 janet l. yellen, “ what the federal reserve is doing to promote a stronger job market ” ( speech at the 2014 national interagency community reinvestment conference, chicago, illinois, march 31, 2014 ), www. federalreserve. gov / newsevents / speech / yellen20140331a. htm. “ differences in unemployment rates across racial and ethnic groups tend to widen sharply during recessions, as less advantaged groups shoulder an outsized share of total layoffs, and these differences shrink during recoveries. for example, in the second quarter of 2017, the unemployment rate for black adult men was a little more than 3 percentage points higher than for white adult men. this differential, while sizable, is nonetheless close to the smallest gap seen since comparable data became available in the mid - 1970s. ” lael brainard, “ why persistent employment disparities matter for the economy ’ s health ” ( speech at “ disparities in the labor market : what are we missing? ” a research conference sponsored by the board of governors of the federal reserve system, washington, d. c., september 26, 2017 ), www. federalreserve. gov / newsevents / speech / brainard20170926a. htm. janet l. yellen, opening remarks ( speech at the “ economic mobility : research and ideas on strengthening families, communities, and the economy, ” a community development research conference sponsored by the federal reserve system, washington, d. c., april 2, 2017 ), www. federalreserve. gov / newsevents / speech / yellen20150402a. htm. janet l. yellen

to 44 % last year. the percentage of bank loans in the total stock of firms ’ external financing in 2017 was just above 12 % ( or 15 %, if intra - company loans and trade credit are excluded from total external financing ). for the same year, if only the stock of debt instruments is considered ( excluding equity sources ), bank loans represented only 28 % of total debt financing ( or 45 %, if net of intra - sectoral financing ). before the crisis, back in 2007, bank loans represented 37 % of total debt financing ( or 60 %, if net of intra - sectoral financing ). second, other structural changes in the financial system are also important in this context : the increased role of secured money market transactions ; the importance of a broad set of market rates beyond the overnight rate, in view of imperfections in arbitrage ; the growing relevance of market - based finance ; and finally, the scarcity of safe assets that affects the functioning of markets and the management of collateral. these developments are behind proposals to keep central bank ’ s balance sheet with significant size to allow the use of a programme like the fed ’ s reverse repo programme ( rrp ) where its stock of government securities is available for repo operations against cash. [ 56 ] the programme would be used to involve more counterparties and affect several interest rates, thereby contributing to a better transmission of monetary policy, in view of the limits to arbitrage hampering the pass - through from short - to long - term interest rates. recent internal work at the ecb also detects similar pass - through imperfections in european markets. furthermore, by keeping a significant balance sheet, albeit much smaller than the present levels creates shortterm safe assets. this would foster financial stability : the unsuccessful attempts by the financial system to engineer “ safer ” private assets, as we saw before the crisis would be unnecessary. both arguments deserve careful consideration for the design of future monetary policy after the present normalisation phase. maintaining a much smaller but still significant balance sheet may be necessary to allow targeting a broader set of interest rates. another related dimension refers to central bank counterparties. central banks have traditionally granted access to monetary policy operations exclusively to credit institutions. nevertheless, non - banks are beginning to play a greater role in the european financial landscape, and are likely to take an even greater role as the capital markets union deepens and broadens financial markets in europe. such a consideration is not neutral for market