Banks remain sufficiently capitalized, while their past due ratios have consistently declined over the years. This enhances their capacity to manage risks and at the same time increase profitability. We expect these improvements to continue given the positive outlook on the macroeconomy. In addition, we continue to have sizeable international reserves to help insulate our domestic economy against external shocks.
In addition, although it is encouraging that productivity growth, the main engine for raising wages and living standards over the longer term, has moved up recently, productivity gains have been subpar throughout this economic expansion. Finding ways to boost labor force participation and productivity growth would benefit Americans and should remain a national priority. Monetary Policy I will now turn to monetary policy.