But my Board colleague Jay Powell talked in depth about this topic in a speech last month, and I would just register my broad agreement with his conclusion – namely that the Federal Deposit Insurance Corporation’s (FDIC’s) so-called “single point of entry” approach to resolution is a promising one.2 The Federal Reserve continues to work with the FDIC on the many difficult implementation challenges that remain, but I believe this approach gets the first-order economics right and ultimately has a good chance to be effective.
We can summarise the magnitude of these two margins of adjustment by comparing the nominal tradeweighted index of the exchange rate (or TWI) with the real TWI rate based on unit labour costs (Graph 3). [4] The nominal TWI appreciated by 25 per cent over this period (from around 2003/04–2011/12). The real TWI appreciated by 45 per cent.