Other factors that have likely contributed to the upward trend are the decrease in the social stigma of filing for bankruptcy and the growing access to credit in the United States. As lenders have become more sophisticated in their ability to assess the riskiness of borrowers, they have extended loans to households that were previously denied credit.
First, that its tool, the provision of reserves to the banking system, will predictably influence that relative price, and with minimal unintended consequences. Second, that adjusting that relative price will, in turn, have a predictable and significant role in achieving our mandate. In the case of equities, I believe that we cannot hold a strong conviction in either regard.