roger w ferguson, jr : community and regional banks - increasing complexity and risk - management needs remarks by mr roger w ferguson, jr, vice - chairman of the board of governors of the us federal reserve system, at the 106th annual convention of the north carolina bankers association, white sulphur springs, west virginia, 21 may 2002. * * * good morning. i am pleased to join you today. though i am not here to discuss financial and economic literacy, i would be remiss if i did not commend the north carolina bankers association for sponsoring camp challenge, your summer camping and financial literacy program. a forum like this provides an opportunity to discuss the evolving nature of community and regional banking, the traditional strengths of such banks, which many of you represent, and the challenges you face, day to day, in managing them in an era of rapid change. more and more, it seems clear that future success will depend on your continuing to use some of banking ’ s traditional advantages as well as on your ensuring that key aspects of risk management effectively address the new complexities of your business. in short, community bankers must remain cognizant of the traditional means by which they have controlled and managed risks, continuing to do well what has been effective in the past, and invest both resources and effort in understanding and managing new features of the regional and community banking landscape. role of regional and community banks in our economy it ’ s useful for a moment to consider the importance of community and regional banking in this country. although a small number of the largest banks in the country control the majority of the nation ’ s deposits and banking assets, regional and community banks remain vital to our economy. time and time again, we have seen the larger banking organizations concentrating resources in a given market segment, reducing their efforts in others, even sometimes pulling out of communities that don ’ t easily fit into their plans. as a result, in many parts of the country, regional and community banks are the dominant financial institutions actively serving the local trade area. but even where they are not the dominant players in a market, smaller banking organizations are traditionally very effective competitors. one enabling factor, to be sure, is that regional and community banks are quick to embrace the benefits brought about by technological change. however, a truly key competitive advantage, which smaller banks continually seek to leverage, is their personal contact with their customers. successful community bankers affirmatively seek to be seen as neighbors and supporters of their depositors and

roger w ferguson, jr : productivity growth - a realistic assessment speech by mr roger w ferguson, jr, vice - chairman of the board of governors of the federal reserve system, at the stockton lectures 2002, london business school, london, u. k., 24 october 2002. * * * i want to thank laura tyson and the other members of the london business school for inviting me to participate in your stockton lecture series. as laura requested several months ago, my topic this evening will be the " new economy " and more specifically the growth of labor productivity. this issue is one of the most studied in macroeconomics, yet it is an area in which obviously far too many puzzles remain. of course, the usual disclaimer applies to my remarks : i will express my own views, and you should not interpret them as the position of the federal open market committee or of the board of governors. how - - you might reasonably ask - - could so many questions remain after so much research on this key topic? the answer - - i submit - - is not that the productivity of my fellow economists is low or that the economics profession has failed in a key mission. rather, it is that the underlying sources of productivity growth are very complex. on the surface, the determinants of productivity growth might seem straightforward : factors such as technological progress, capital deepening, and the changing institutional structure of labor and product markets. however, these fundamental determinants shift in importance over time and often do not lend themselves to measurement in the real world. as you know, to measure the hours worked of a lawyer, a doctor, a business school dean, or even a governor of a central bank is easy. but evaluating the quantity of our collective output is much more difficult. thus, before embarking on any serious discussion of productivity growth, one must recognize the very difficult measurement challenges that we face. different methods of data construction will yield different answers to important questions. but if we are consistent in our methods, i believe both our aggregate statistics and also microeconomic studies of productivity growth at the firm and industry level can yield important insights. with that caveat about productivity measurement aside, let me state right from the outset of this lecture that i continue to be cautiously optimistic about productivity growth in the united states. based on my reading of the data and my understanding of numerous business case studies, i believe that trend labor productivity in the united states accelerated in the mid - 1990s. that acceleration reflected several factors