meet high standards of capital planning backed by strong risk management when we began ccar. given that initial gap, we have allowed time for firms to work toward full achievement of those standards. thus, what may be perceived as a raising of the bar every year is better understood as our effort to provide a demanding, but still realistic, glide path for firms to reach that goal. we do, however, expect firms to continue to make steady progress each year. second, the horizontal nature of the qualitative assessment does not mean that every year one or more firms must receive an objection on qualitative grounds. the comparative approach helps ensure that firms are evaluated consistently and fairly. and it does allow us to see where specific firms may be outliers from good practices followed in the rest of the industry. but this is not a pga tournament – there is no foreordained cut that some participants will miss. third, while there are minimum standards for all ccar firms, the standards are more stringent for firms of greater systemic importance. 13 it is not enough for the largest and most complex banking organizations to meet only the minimum standards in ccar. we expect the more systemically important firms to establish and maintain the most sophisticated riskmanagement and capital planning practices. their risk management and capital adequacy should be sufficiently strong to help ensure their resiliency to a range of unexpected stress events, since their distress could pose a threat to the financial system and to the broader economy. fourth, precisely because of its importance to our supervisory program, the qualitative assessment will continue to be progressively more integrated into year - round supervision of the ccar firms. while some important features of capital planning are observable only during the formal ccar process, most of the risk - management and capital planning standards incorporated in ccar are operative and observable by supervisors throughout the year. these should be an important focus of ongoing supervisory oversight and of discussions between firms and supervisors. only in unusual circumstances should supervisors learn for the first time during ccar of significant problems in the quality of the capital planning processes, and only in unusual circumstances should firms be surprised at the outcome of the qualitative assessment. see 12 cfr 225. 8 ( e ) ( 2 ) ( ii ). it is also worth emphasizing that both elements of ccar – the qualitative and the quantitative assessments – only apply to bhcs with $ 50 billion or more in total consolidated assets. the dodd

for the quality of life not only in the united states but around the world. the explosion in the variety of products of many different designs and qualities has opened up the potential for the satisfaction of consumer needs not evident even a decade or two ago. the accompanying expansion of incomes and wealth has been truly impressive, though regrettably the gains have not been as widely spread across households as i would like. how is this remarkable economic machine to be maintained, and how can we better ensure that its benefits reach the greatest number of people? certainly, we must foster an environment in which continued advances in technology are encouraged and welcomed. if, as i indicated in a commencement address this spring, the graduates of 1999 are going to be able to build on the accomplishments of their forebears, many of them must push forward to expand our knowledge in science and engineering, and our universities must ready themselves to meet the technical needs of our students yet to come. but scientific proficiency will not be enough. skill alone may not be sufficient to move the frontier of technology far enough to meet the many challenges that our nation will confront in the decades ahead. and technological advances alone will not buttress the democratic institutions, supported by a rule of law, which are so essential to our dynamic and vigorous american economy. each is merely a tool, which, without the enrichment of human wisdom, is of modest value. a crucial challenge of education is to transform skills and intelligence into wisdom – into a process of thinking capable of forming truly new insights. but learning and knowledge – and even wisdom – are not enough. national well - being, including material prosperity, rests to a substantial extent on the personal qualities of the people who inhabit a nation. civilization, our civilization, rests on the presumption of a productive interaction of people engaged in the division of labor, driven by a process economists label comparative advantage. this implies mutual exchange to mutual advantage among free people. to repeat what i said five years ago here in grand rapids before the gerald r. ford foundation : institutions are needed that give free play to the inventive capacities of people and effectively promote the translation of conceptual innovations into increased output of goods and services that are the lifeblood of material progress. what these particular institutions should be has not always been as clear as it is today. much of this past century, in effect, has been a test of whether capitalist institutions or more centrally planned socialist institutions would work better, over the long run, in serving the needs of human