4  BIS Review 21/2010  sources of funding are not available. The Federal Reserve’s ability to inject liquidity into the financial system is critical for preserving financial stability and for supporting depositories’ key role in meeting the ongoing credit needs of firms and households. Regulatory reform Strengthening our financial regulatory system is essential for the long-term economic stability of the nation.
The reason is that a wage increase consistent with achieving a certain inflation rate is higher when the pace of increase in labor productivity is high, and lower when the pace is low (Chart 13).