william c dudley : “ remarks at the new york fed ’ s economic press briefing on the regional economy ” opening remarks by mr william c dudley, president and chief executive officer of the federal reserve bank of new york, at the economic press briefing on the regional economy, federal reserve bank of new york, new york city, 18 august 2016. * * * jaison abel, jason bram, hunter clark, giacomo de giorgi, richard deitz, jack gutt, andrew haughwout and joseph tracy assisted in preparing these remarks. good morning and welcome to the new york fed ’ s economic press briefing. i am pleased to have this opportunity to speak with the journalists covering our region. you are an important communication channel to the people in our district. this morning i want to focus on economic conditions in our region, giving particular attention to job growth. i also want to discuss our ongoing work on puerto rico. as always, what i have to say reflects my own views and not necessarily those of the federal open market committee or the federal reserve system. the new york fed is deeply committed to serving our region. this commitment manifests itself in several ways. we produce business surveys and local economic indexes to help our constituents track regional economic conditions. my staff writes papers and blog posts on economic issues important to our region. we meet with a number of advisory boards comprised of community and business leaders. and, i regularly visit different parts of our district so that i can meet with local businesses, community development professionals, and the people who live and work here. this on - the - ground intelligence is valuable to me and helps inform my view of the region and the economy, which, in turn, plays an important role in shaping my outlook on policy. let me now talk a bit about job growth in our region. job growth in the region nationally, the labor market has added 2. 4 million jobs over the past year. and, the strong jobs reports released over the past two months have helped allay concerns that arose earlier this year that job growth was beginning to stall. indeed, these reports reinforce my view that labor market conditions continue to improve. turning to conditions closer to home ; job growth in our region has generally been somewhat below the national pace. one important exception is new york city, where job growth has been strong, despite the relatively sluggish performance of the financial services industry. in the past, the city has counted on job growth from wall street to fuel economic growth

bit about each of these in turn. first is the more systematic identification of risk, covering a wider range of risks. this is something on which i would say that hong kong is already in many respects quite well advanced. for several years now the hkma has adopted what we term a “ risk - based supervisory approach ”. this involves a number of steps. first, the inherent risks being run by an institution in each of its business lines are identified. eight inherent risks are focused on - credit risk, market risk, interest rate risk, liquidity risk, operational risk, legal risk, reputation risk and strategic risk. these risks are then classified as either “ high ”, “ moderate ” or “ low ”, taking into account the current position and likely future developments. the risk control practices to manage these inherent risks are then evaluated, and classified as “ strong ”, “ acceptable ” or “ weak ”. this evaluation takes account of such factors as management oversight, policies and procedures, risk measurement and internal controls. the final step is to combine the assessments so as to determine whether, for each business line, the risk controls are adequate given the level and direction of risk. this helps identify areas where there is an apparent mismatch - for example where a particular business line is assessed as “ high ” risk but the risk control is assessed as “ weak ”. appropriate follow - up action would then be conducted. i ’ ve gone into quite a lot of detail on this to make the point that the dialogue between the banks and supervisor in hong kong already currently focuses on the full range of risks, even though only a small sub - set of these risks are currently addressed in the capital framework. so, as i said before, hong kong is quite well advanced in this area. as time goes on, however, we would expect to see the banks themselves doing more of this analysis and the supervisors less. indeed, in time we would expect at least the larger banks to have a fairly well - developed process for assessing all the risks inherent in their business, the quality of the management of these risks, and ultimately how much capital they need to hold in respect of these risks. the second area i mentioned in which we can expect to see some developments is the increased used of quantitative techniques, including modelling and stress - testing. again, this is something that is already happening, but is something to which basel ii will give added impetus. the most obvious area for this, of course, is credit risk,