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Mortgage lending obviously a big important part of that.
How is how is lending.
Commercial lending mortgage lending small business lending going in your district.
Power how is the health of the banks in your district.
Loan demand remains pretty weak.
Across the board of bankers report that to -- frequently.
There has been some.
Rise in certain categories.
Consumer finance for example auto loans had picked up.
But overall it's not really a strong.
Loan demand environment.
The banks are returning to health -- And they're repairing their balance sheets that said in the southeast from the in all likelihood we'll still see some bank failures because the banks were.
Far over exposed to either residential or commercial real state.
You've heard some of the banks particularly community banks -- talk about.
About lending standards.
You know that the Fed is is focused on lending standards because they've been tight -- -- Loosening gradually.
What's going on with with the lending standards and and -- -- -- this -- a result of very tough examination and then the chairman has has talked about that.
Are are are you addressing that here and in.
You're -- lending standards are higher than they were -- let's say in 2006 and 2007.
Appropriately appropriately so I think they -- and we learned some lessons and banks are not as.
Quite as liberal with.
Loans is they might have been in at that time.
There's also a long term.
Evolution going on and in banking system.
-- heavy bias to real estate collateral or real estate purpose lending.
Two more general lending to.
Two small businesses are -- -- commercial industrial.
Enterprises of various kinds.
That's going to take some time there's skill sets that need to be developed among.
The bankers and borrowers who come with.
Real estate in one form or -- are finding it very difficult to get loans.
Because the banks are trying to rebalance themselves from the point of view of their assets about.
Started by the standards too tight and our and -- you -- talking here examiners about.
You know finding a balance there as well.
Our examiners and are supervision and regulation function are continuing to stress that it's important for the banks.
To clean up their balance sheets to get there.
Which means they have healthy balance sheets.
We continue to emphasize that so I think there is.
Some truths and name.
Views it regulators.
Are tough there's some truth.
In the views that lending standards have risen.
And there's also -- -- a view that loan demand is relatively weak.
That's a circular yeah I know exactly.
Of self reinforcing picture but I think that's the case but.
Are you okay with that scenario that has -- as a regularly I think it is the reality I think each of the parties involved is.
Pursuing their they're.
They're job seriously.
And with a better economy we will see some relaxation of of lending standards in an obviously more lending.
Let me finish up by getting back up to the to the FOMC you'll be back on -- -- -- January.
You are the one that may have to vote on.
The exit strategy for for the policy and it was clear in the minutes in June that the that the FOMC members had agreed on -- unprincipled.
What are your thoughts on that how do you exit how quickly do you.
Well certainly I supported the principles that were published along with the most recent minutes the basic point which is it.
Will in all likelihood.
Start the process of normalization.
We it's ceasing to reinvest.
And then shortly thereafter.
A rate hike the federal funds target rate.
Communications -- related to extended period or whatever some combination of of those factors I think the principles are sound.
Certainly I supported them and -- discussion we had in the meeting and I think we're very well prepared.
However I think the publishing of the principles should not be taken as an indication that this is necessarily going to happen soon.
Finally it's the one year birthday.
Anniversary of Dodd-Frank.
The -- finance their financial reform legislation passed congress a year ago this week.
How is Dodd-Frank.
Playing out to you how how is it working is it working well are there problems whether it -- congress'.
And the administration need to make any changes tweak it.
-- won't get into what congress shooter should not do.
In follow up legislation it's common did.
There are fixes to legislation when certain consequences developed.
I'd say from the Fed's perspective my perspective here in in this reserve bank.
It is an enormous task and we have been focused on implementation.
Doing what we're supposed to do -- Some of the dates of slipped.
Allen and therefore you could I think -- argue overall that there is manna.
A little bit of slippage and name implementation.
Some -- the the key.
Provisions of the legislation -- require.
Creating a consensus with other agencies and that has gone slower in some cases and we would like.
-- -- on the job we're trying to implement but it's it's a little slower than what was written into law.
-- in effect -- the slipped on the question about bank capital because as you know there.
There's there's domestic bank capital issues and and international and -- Harmony.
Bank capital on a big debate these new bank capital rules coming out of the Basel III discussions.
Any thoughts about about how that should play -- You know I think the the most recently.
It involved as I believe -- two and a half percent surcharge -- the biggest thing for the biggest banks to systemically important banks.
Is a reasonable compromise.
I know certainly there is great sensitivity on the part of the bankers.
Of having to raise too much capital to dilute current shareholders.
-- mark apple and they think they need.
I -- in agreement with the views it that a surcharge for those that really redeem its systemically important.
Is appropriate and I think the overall.
Effect of Basel III will be a much better capitalized banking system and that's going to make the future much safer.
Lockhart of Atlanta fed thank you so much for direct -- -- here.
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