alan greenspan : productivity speech by mr alan greenspan, chairman of the board of governors of the us federal reserve system, at the us department of labor and american enterprise institute conference, washington, d. c., 23 october 2002. * * * the increase in nonfarm business output per hour over the past year will almost surely be reported as one of the largest advances, if not the largest, posted over the past thirty years. we at the federal reserve, along with our colleagues in government and the private sector, are struggling to account for so strong a surge. we would not be particularly puzzled if the increases in output per hour were occurring during a period of very rapid economic growth, such as has often attended recoveries from steep recessions. historically, such recoveries have allowed overhead and maintenance employee hours to be spread over a rapidly increasing level of production. but during the past year we averaged only modest economic growth. the reported estimates of output per hour do not appear to have resulted principally from faulty data or measurement error. whether output is measured from the expenditure side or from the independently estimated income side of the national accounts, and whether hours of work are measured from the survey of establishments or the survey of households, the same basic result is clearly evident : an impressive gain in output per hour over the past year. this conclusion is buttressed by recent sizable increases estimated for labor productivity for the manufacturing sector, derived from a data system that, for the most part, is independent of the national accounts. to be sure, because the productivity feast of recent quarters has been so difficult to explain, many analysts expect a productivity famine in the period ahead. others, however, are not so pessimistic. regardless of how events unfold, we will need to confront difficult questions posed by the recent performance of productivity, if we are to properly evaluate economic developments going forward. indeed, if the recent surge in measured productivity is not a statistical mirage, or if it is not expunged by data revisions, then we need to ask about its possible causes. clearly, over the past year corporate managers, confronted with tepid demand and a virtual disappearance of pricing power, have struggled to maintain profit margins. with price increases largely off the table and demand soft, lowered costs have become the central focus of achieving increased profitability. on a consolidated basis for the corporate sector as a whole, lowered costs are generally associated with increased output per hour. much of the recent reported improvements in cost control doubt

code of conduct and principles was issued last year by bank negara malaysia. in a more positive light, there is evidence that public trust in banks around the world is improving. this is something we can build upon. the right place of finance is to be the catalyst for the economy. as guardians of public trust, bankers must protect the system against any threats. this means protecting against abuse, misconduct and exploitation. no banker should tolerate misselling of products to customers which are not suited to their needs. no banker should tolerate charging excessive and hidden fees to unsuspecting customers and use these fees to excessively enrich themselves. no banker should tolerate unethical and illegal behaviour of a fellow colleague. no banker should tolerate any wrong doing or misconduct. the currency of bankers is not money but trust. loss of trust is calamitous for the profession. 1 / 4 bis central bankers'speeches for us in malaysia, our approach to ensure professionalism, trust and confidence rests upon a two - pronged strategy. the first is to create a system that upholds the values of honesty and integrity. professional organisations such as aicb play a crucial role in this, with the chartered banker accreditation as a tool. the syllabus for this qualification places importance on ethics and professional standards. the requirement for fresh graduates to undergo an induction course on ethics is also a good starting point. there are other initiatives in store, we will step up efforts to ensure that the roles, responsibilities and accountabilities of leaders of financial institutions are clear and transparent. to this end, consultations with the industry will be conducted this year on proposals to sharpen accountability of individuals holding senior roles. the second complementary strategy is to create an enabling environment to empower financial institutions to make informed and sound hiring decisions. effective 1 july 2018, it will be a requirement for financial institutions to screen all new hires, except those performing ancillary functions. this includes their employment history and criminal records. financial institutions will be required to keep proper records related to employees and to provide the required information when requested by another institution. this will guard the system against disreputable staff and enact barriers against potential threats to the integrity of the system. as guardians of the system, bankers need to look at these requirements as useful enabling tools or defenses that help with their mission to successfully protect the integrity of the system. guardians of knowledge and wisdom the complexity scientist, samuel arbesman in his study of how knowledge develops,