The role of liquidity in systemic events provides yet another reason why, in the future, a more system wide or macroprudential approach to regulation is needed.

Long-term unemployment is particularly costly to those directly affected, of course. But in addition, because of its negative effects on workers' skills and attachment to the labor force, long-term unemployment may ultimately reduce the productive capacity of our economy.

In any given month, a large number of workers are being hired or are leaving their current jobs, illustrating the dynamism of the U.S. labor market.

Because a person has to be either working or looking for work to be counted as part of the labor force, an increase in the number of people too discouraged to continue their search for work would reduce the unemployment rate, all else being equal - but not for a positive reason.

The children of the unemployed achieve less in school and appear to have reduced long-term earnings prospects.

For many of us, owning a home signaled a passage into adulthood that coincided with the start of a career and family.

High levels of homeownership have been shown to foster greater involvement in school and civic organizations, higher graduation rates, and greater neighborhood stability.

Home purchases that are very highly leveraged or unaffordable subject the borrower and lender to a great deal of risk. Moreover, even in a strong economy, unforeseen life events and risks in local real estate markets make highly leveraged borrowers vulnerable.

Now that I'm a civilian again, I can once more comment on economic and financial issues without my words being put under the microscope by Fed watchers.

Certainly, 9 percent unemployment and very slow growth is not a good situation.

Stronger regulation and supervision aimed at problems with underwriting practices and lenders' risk management would have been a more effective and surgical approach to constraining the housing bubble than a general increase in interest rates.

When historical relationships are taken into account, it is difficult to ascribe the house price bubble either to monetary policy or to the broader macroeconomic environment.

Many savers are also homeowners; indeed, a family's home may be its most important financial asset. Many savers are working, or would like to be.

Only a strong economy can create higher asset values and sustainably good returns for savers.

The Federal Reserve Act requires the Federal Reserve to report annually on its operations and to publish its balance sheet weekly.

The Fed's policy choices can always be debated, but the quality and commitment of the Federal Reserve as a public institution is second to none, and I am proud to lead it.