To comprehend this point, it is useful to decompose long-term nominal yields into four components: expected inflation over the term of the asset; the expected path of short-term real rates; the inflation risk premium and real term premium, which together represent the compensation required by investors for holding long-term bonds as opposed to rolling over short-term securities.
Over the longer term, we also look forward to working with our counterparts at other supervisory and regulatory agencies in the United States and around the world to address the structural issues – some of which have been discussed in this conference – that have led to this crisis so as to minimize the risk of ever facing such a situation again.