##ntial standards for large banking organizations and nonbank financial firms designated by the fsoc. these standards will include enhanced risk - based capital and leverage requirements, liquidity requirements, and single - counterparty credit limits. the standards will also require the fsoc ’ s internal structure consists of a deputies committee – composed of personnel from all of the voting and nonvoting members – and six other standing committees, each with its own specific duties. the deputies committee, under the direction of the fsoc members, coordinates the work of the six committees and aims to ensure that the fsoc fulfills its mission in an effective and timely manner. bis central bankers ’ speeches systemically important financial firms to adopt so - called living wills that will spell out how they can be resolved in an orderly manner during times of financial distress. the act also directs the federal reserve to conduct annual stress tests of large banking firms and designated nonbank financial firms and to publish a summary of the results. to meet the january 2012 implementation deadline for these enhanced standards, we anticipate putting out a package of proposed rules for comment this summer. our goal is to produce a well - integrated set of rules that meaningfully reduces the probability of failure of our largest, most complex financial firms, and that minimizes the losses to the financial system and the economy if such a firm should fail. the federal reserve is working with other u. s. regulatory agencies to implement dodd - frank reforms in additional areas, including the development of risk retention requirements for securitization sponsors, margin requirements for noncleared over - thecounter derivatives, incentive compensation rules, and risk - management standards for central counterparties and other financial market utilities. the federal reserve has made significant organizational changes to better carry out its responsibilities. even before the enactment of the dodd - frank act, we were strengthening our supervision of the largest, most complex financial firms. we created a centralized multidisciplinary body called the large institution supervision coordinating committee to oversee the supervision of these firms. this committee uses horizontal, or cross - firm, evaluations to monitor interconnectedness and common practices among firms that could lead to greater systemic risk. it also uses additional and improved quantitative methods for evaluating the performance of firms and the risks they might pose. and it more efficiently employs the broad range of skills of the federal reserve staff to supplement supervision. we have established a similar body to help us effectively carry out our responsibilities regarding the oversight of systemically

- essentially the same pace as in march 2003, and the core pce price index change from twelve months earlier moved back above the 1 percent level in both february and march. although the increased pace of economic activity has put some upward pressure on prices at earlier stages of processing and higher energy prices are being passed through to the prices of some products, strong productivity growth and slack in resource utilization have kept core retail price increases in check. household financial conditions some commentators have expressed concern about the rapid growth in household debt in recent years, fearing that households have become overextended and will need to rein in their spending to keep their debt burdens under control. my view, however, is considerably more sanguine. although there are pockets of financial stress among households, the sector as a whole appears to be in good shape. as bankers, you are well aware that households have taken on quite a bit of debt over the past several years. according to the latest available data, total household debt grew at an annual rate of 10 percent between the end of 1999 and the fourth quarter of 2003 ; in comparison, after - tax household income increased at a rate of 5 percent. but looking below the aggregate data, we must understand that the rapid growth in household debt reflects largely a surge in mortgage borrowing, which has been fueled by historically low mortgage interest rates and strong growth in house prices. indeed, many homeowners have taken advantage of low interest rates to refinance their mortgages, some having done so several times over the past couple of years. survey data suggest that homeowners took out cash in more than one - half of these “ refis, ” often to pay down loans with higher interest rates. on net, the resulting drop in the average interest rate on household borrowings, combined with the lengthening maturity of their total debt, has tempered the monthly payment obligations from the growing stock of homeowners'outstanding debt. the federal reserve publishes two series that quantify the burden of household obligations. the first series, the debt service ratio, measures the required payments on mortgage and consumer debt as a share of after - tax personal income. the second series, the financial obligations ratio, is a broader version of the debt service ratio that includes required household payments on rent, auto leases, homeowners'insurance, and property taxes. both ratios rose during the 1990s, and both reached a peak in late 2001. since then, however, they have receded slightly on net from their