in the first place. the third challenge for the federal reserve is to put financial stability on par with monetary policy. as our experience from 2007 to 2009 has demonstrated, monetary policy cannot work properly when there is financial instability. when financial instability occurs, it disturbs market functioning and can impair bank balance sheets in a way that disrupts their financial intermediation function, constraining the availability of credit for households and businesses. this, in turn, can lead to further reductions in aggregate demand that put additional stress on bis central bankers ’ speeches the weakened financial system. financial stability cannot be subordinated to any other priority. the fourth challenge is to sustain and enhance the capabilities of the new york fed. this starts most obviously in continuing to attract, develop and retain the best people. but it also extends to tending to the so - called culture of the institution – for example, ensuring that good ideas rise to the top no matter where they originate, and that people feel comfortable to challenge the conventional wisdom. these challenges are energizing, and that ’ s why being president of the new york fed is the greatest job in the world. and i am confident that, because of the talent and dedication of our staff, the new york fed will succeed in surmounting the challenges it faces now and will face over the next 100 years. and to drive home the point of our staff ’ s dedication, i would like to highlight the efforts of one person, rosemary lazenby, who has made this exhibit possible. rosemary is the longest tenured employee at the bank – 55 years – she is our resident historian and curator and she has delayed her retirement in order to develop this centennial exhibit. her efforts are just another example of what really glistens at 33 liberty street ( and i am not referring to the gold in our vault ). thank you rosemary, and thank you all for coming out this this evening to enjoy the centennial exhibit. bis central bankers ’ speeches

the federal reserve ’ s friends from the international central banking community : mervyn king, the recent head of the bank of england. mervyn and his wife recently moved to new york city, so we should extend a warm welcome to them. for mervyn, i am guessing that one hundred years may not seem like a long time, given that the bank of england is over 300 years old, but i am sure he will graciously allow us our moment. we are also joined by many other friends and associates of the new york fed, and a great number of our current and former staff. for 100 years the federal reserve has been an essential contributor to american economic prosperity and stability and that record is reflected in this fascinating exhibit. rather than focus on its achievements during my brief remarks this evening, i thought i ’ d highlight what i think makes the institution that i have the honor of leading, the new york fed, such a remarkable place within this extraordinary system. first, we are a bank within government. that means we not only have researchers, supervisors and market analysts, but we also provide banking services and possess significant operational capabilities. we accept deposits, make loans and operate the system open market account for the federal open market committee. when exigent and unusual circumstances require extraordinary operations, be it in a financial crisis or to implement bis central bankers ’ speeches unconventional monetary policies, we stand ready. our operational capabilities complement our more conventional central bank policy role in a way that is, i think, very special within the federal reserve system. second, the new york fed is a vital component of the international role played by the federal reserve system. this can be seen in our central bank international account services, where we have more than $ 3 trillion in foreign assets under our management. some of those assets glisten on the bedrock of manhattan. the gold vault at 33 liberty street remains the world ’ s largest depository of monetary gold held on behalf of foreign governments, central banks and official international organizations. this international orientation was also very much in evidence during the crisis as we negotiated foreign exchange swap agreements with a number of foreign central banks and then operationalized the provision of dollar liquidity worldwide through a coordinated system of dollar auctions. third, and perhaps most importantly, we have an unusually talented and dedicated group of people working at the bank who are committed to promoting the mission of the institution and serving the public interest. while we may not, on occasion, be as nimble as we might