delivered at " building a financial structure for a more stable and equitable economy, " the 22nd annual hyman p. minsky conference on the state of the u. s. and world economies, sponsored by the levy economics institute of bard college, held in new york, april 17 – 19. see national employment law project ( 2012 ), “ the low - wage recovery and growing inequality ( pdf ), ” data brief, report ( new york : nelp, august ). bis central bankers ’ speeches government were reported to have dropped at an annual rate of more than 8 percent in the first quarter of this year, following an even larger drop in the fourth quarter of last year. these cuts in federal spending are likely to be an important influence on the near - term prospects for economic growth, and i will say more about this issue in a moment. in contrast to the federal government, the budget outlook for state and local government continues to improve, and the drag on economic activity from this sector's cutbacks in spending has diminished considerably. reflecting some of these mixed influences, as i already noted, real gdp has been rising at a very modest rate, and the labor market has shown similarly modest gains over the past year, with the unemployment rate coming down about 1 / 2 percentage point. to more fully understand the experience of the 11. 7 million americans who can't find work, we look to broader measures of labor underutilization, which take into account job seekers who have stopped looking for work because they have become discouraged, and people working part time but who would prefer to work full time. recently, these numbers seem to be coming down. the gains in payroll employment over this period have been about in line with the decline in the unemployment rate, although, as is typical, the pace of job gains has been somewhat erratic in recent months. since the beginning of the year, the increases in payroll employment have averaged 196, 000 per month, a little above the 183, 000 average monthly gains observed during 2012. other indicators from the labor market have also shown some improvement recently. initial claims for unemployment insurance have declined since last summer, and the number of job openings appears to be increasing. i hope these indicators mean we are turning the corner on some of the painful costs associated with being unemployed or underemployed in america. turning to inflation, recent data show that price pressures have remained subdued. both total and core inflation were only about 1 percent over the 12 months ending

all miss the same key risks. 2 such a culture could possibly create vulnerabilities in the financial system. at the fed we try to address this issue, in part, through appropriate disclosure about the supervisory stress test. we have published information about the overall framework employed in various aspects of the supervisory stress test, but not the full details that banks could use to manage to the test. this - making it easier to game the test - is the potential negative consequence of transparency that i alluded to earlier. we also value different approaches for designing scenarios and conducting stress tests. in the united states, in addition to supervisory stress testing, large financial firms are required to conduct their own stress tests, using their own models and stress scenarios that capture their unique risks. 3 in evaluating each bank ’ s capital planning process, supervisors focus on how well banks ’ internal scenarios and models capture their unique risks and business models. we expect firms to determine the risks inherent to their businesses, their riskappetite, and to make business decisions on that basis. and that is a good place to stop. thank you. ben s. bernanke ( 2013 ), “ stress testing banks : what have we learned? “ speech delivered at the “ maintaining financial stability : holding a tiger by the tail ” financial markets conference sponsored by the federal reserve bank of atlanta, stone mountain, april 8. under the dodd - frank act, all financial companies with more than $ 10 billion in total consolidated assets that are supervised by a primary federal financial regulatory agency are required to conduct an annual companyrun stress test. however, only bank holding companies with $ 50 billion or more in total consolidated assets are subject to the supervisory stress test and an evaluation of their capital planning process. bis central bankers ’ speeches