The proposed revisions, especially the advanced approaches of Basel II, represent a sea change in how banks determine their minimum level of required capital for regulatory purposes. The advanced approaches are intended to better align regulatory capital with inherent risks and banks' internal economic capital and will encourage large complex organizations to strengthen risk-measurement and -management systems.
It has said too that it expects inflation to move back toward 2 percent over the medium term. By easing monetary policy relative to its current stance, the FOMC could facilitate a more rapid fall in unemployment and more rapid return to 2 percent inflation.