Under this interpretation, the lower line in the bottom panel of Figure 1 is an estimate of market inflation expectations over the next five years, and the upper line represents five-year forward expectations of inflation, that is, today’s expectation of what average inflation will be between 2009 and 2014.
In my remarks this morning, I want to describe some features of an appropriate regulatory capital framework for banks – focusing on community banks – and I’ll cut to the chase by setting out what I believe to be two imperatives in finalizing this framework. Each of these imperatives has, at its core, the inherent goals of minimizing uncertainty and promoting safety and soundness.