Here, the challenge lies in selecting a set of indicators that can condition a timely policy choice, given the discrete nature of the instruments. To this end, we have put in place a macro-surveillance system to  2  BIS Review 141/2010  monitor vulnerabilities in seven key areas; namely, property market, stock market, banking sector, non-financial corporate sector, household sector, government sector, and external sector. Indicators are used to evaluate the build-up of vulnerabilities and imbalances in these sectors and the need for macroprudential measures is then assessed. This ultimately boils down to a judgement call. For us, integrating macroprudential measures in the overall macroeconomic modelling exercise to ensure a consistent and timely policy outcome remains a key priority. Finally, I want to come back to the point I raised earlier about the global nature of capital flows and the national orientation of policy. This is an important point and applies both to emerging markets and advanced economies. Simply put, the current cycle of capital flows has a strong international dimension as a key driving force of capital flows is the exceptionally low interest rates in the major economies. Hence, policy response by emerging markets is made more demanding if the problems at the source remain. Therefore, given the potential destabilizing influence that capital inflows may have on emerging markets, a question that must be asked is whether there are gains to be had for the global economy as a whole in moving away from exclusively domestic-oriented policies?
William C Dudley: Higher education - financing, costs and returns Opening remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Conference on “Higher Education Financing and Costs and Returns of Higher Education”, Federal Reserve Bank of New York, New York City, 7 December 2017. * * * Good morning. It is my pleasure to welcome you to the New York Fed for today’s conference on the costs and returns of higher education and higher education financing. I am delighted to see such broad interest and attention from the academic community on this topic. The role of education and education financing in today’s labor market and economy has never been more important. It is a topic that I have spoken about frequently during my tenure here at the New York Fed, especially with regard to education’s importance for economic mobility. Understanding educational investment decisions and their macroeconomic implications requires rigorous analysis from top academic researchers like you. Let me briefly discuss some developments that I find particularly significant and worthy of investigation. As always, what I say represents my own views and not necessarily those of the Federal Open Market Committee or the Federal Reserve System.1 As has been well documented by Raj Chetty and his co-authors, income inequality has increased in recent decades, while economic mobility has stagnated. Meanwhile, absolute mobility appears to have fallen, indicated by the declining share of children who earn more than their parents.