Economic Letter

A major advancement in risk management among large financial institutions has been the development of internal risk models. The models encompass institutions’ procedures and techniques for assessing portfolio risk.

Over the past four decades, overall income inequality has increased in the U.S. One particularly striking feature of the data is that the income gap has widened most between the top and the middle of the distribution, while it has remained relatively stable between the middle and the bottom.

This Economic Letter is adapted from a speech by Janet L. Yellen, president and chief executive officer of the Federal Reserve Bank of San Francisco, to the National Association for Business Economics in San Francisco, California, on September 10, 2007.

As important as productivity growth is to the health of the economy, much remains to be understood about how and why its trend growth rate changes. This Economic Letter discusses some of the points of debate in the research on these issues.

Most people barely think twice anymore when they discover that their toothbrush was made in China, their tee-shirt was made in Honduras, and their car was made in Germany. With an increasing volume of goods and services flowing around the world, it is natural to assume that the marketplace has become “global,” which is to say, much more integrated.

The San Francisco Bay Area has long been a key center of information technology (IT) innovation and production. This Economic Letter explores how IT employment trends have evolved in this area, as well as how they compare to other key IT centers and the nation.

Community banks, by virtue of their size and emphasis on so-called relationship banking, typically have limited geographic scope in their activities. This would seem to imply that their financial performance would be tied closely to the financial condition of their customers and, thus, to the economic conditions in regional banking markets.

From January 2000 through this past June, the 10-year U.S. Treasury bond yield has moved over a wide range, falling from 6.8% in early 2000 to 3.1% in June 2003 and rising back to over 5% more recently. The interest rate on 30-year fixed-rate mortgages has similarly varied from a high of 8.6% in 2000 to a low of 5.2% in June 2003 and back to about 6.75% more recently.

This Economic Letter is adapted from a speech by Janet L. Yellen, president and chief executive officer of the Federal Reserve Bank of San Francisco, delivered via videoconference to the First Annual Conference of the U.C. Berkeley-National University of Singapore Risk Management Institute, on July 5, 2007.

This Economic Letter summarizes the presentations made at a symposium by the same title sponsored by the Center for the Study of Innovation and Productivity and held at the Federal Reserve Bank of San Francisco on May 25, 2007.