with $ 10 billion or less in assets from reporting requirements, which the federal reserve supported, due to the lack of 2 / 5 bis central bankers'speeches trading activity that community banks engage in. this overtook efforts by the fed and other regulatory agencies to refine the volcker rule, but the bottom line is that this broad exemption is law and in the process of being implemented. another change in the new legislation raises the asset threshold for bank holding companies eligible for the small bank holding company policy statement from $ 1 billion to $ 3 billion. the law also exempts bank holding companies with $ 50 billion to $ 100 billion in assets from enhanced prudential standards and exempts banks with less than $ 100 billion in assets from future stress testing. the lifting of this threshold importantly allows the federal reserve to tailor its rules for these firms moving forward while retaining the ability to protect the safety and soundness of the system. i mentioned steps related to call report streamlining, and the legislation addresses this topic also, allowing reduced call report requirements for certain banks with less than $ 5 billion in assets. for banks that are well managed and well - capitalized, the asset threshold was raised for a longer, 18 - month examination cycle from $ 1 billion to $ 3 billion. the legislation would also exempt from an appraisal requirement rural properties for loans of less than $ 400, 000, under certain circumstances. a common theme in the legislation and the fed ’ s steps to improve our regulation and supervision is tailoring. as the fed continues to evaluate the effectiveness and efficiency of regulations, i expect tailoring will be a guiding principle. let me now address international efforts to promote financial stability, specifically those centered in the financial stability board. in the run - up to the crisis, as i ’ m sure you all know, decades of relative stability in the united states had left both the financial industry and government agencies complacent about potential threats. and even though financial crises had occurred during that time in some advanced economies, it is fair to say that the united states and other nations did not place a high probability on a crisis that could be global in nature. as a result, international coordination and collaboration on financial stability was limited, and there was a shortage of detailed and standardized information about financial conditions and vulnerabilities in different countries. as the crisis descended and the global nature of the problems became clear, the united states and other major economies, working through the group of twenty nations, created the financial

system creates disincentives to work in the formal sector, and suggests that tax reform could produce a growth dividend as well as a more reliable source of revenue. on top of the low labor force participation is the well known and deeply concerning high level of out - migration. in addition to the lack of labor demand, it seems likely that quality - of - life concerns such as high crime rates are playing a role in these decisions. this underscores the importance of basic public service delivery and is another example of the interplay between fiscal and economic outcomes. another important dimension of labor supply involves the skills that workers bring to the market. many of these skills are acquired while in school. our research indicates that test scores for school - age children on the island are low, suggesting that there is an opportunity for improvement in the quality of public education. one clear lesson from recent research in urban and regional economics is that the collective skills of the people living in an area are a critical ingredient for its growth prospects. improving the education available to residents can pay large dividends over time. i know that this list seems long, and none of issues i have raised are easy to address. nonetheless, i am confident that puerto rico has started on the road to recovery. in the current environment, it ’ s hard to see beyond the immediate crisis to a brighter future for puerto rico, but that has been said of other places that have come back stronger than ever. getting the fiscal situation in order is an important first step. the factors leading up to the crisis took many years to develop, and history shows that a successful recovery from a crisis also takes time. it is important to recognize that fact and to stay the course. before i conclude, let me briefly discuss our new survey. earlier this month, the new york fed released the puerto rico small business survey, which focuses on the business performance, financing needs and borrowing experiences of firms across the island. the survey is intended to fill important knowledge gaps and flag potential economic growth opportunities for the commonwealth. it was designed with input from partners here in puerto rico, and we are very grateful for their cooperation. key findings reveal that firms are persevering through puerto rico ’ s economic crisis, though a majority reported declining revenues. managing cash flow is a top concern, ranking above concerns about rising business costs. there is significant demand for credit, with the most common reason being the need to meet operating expenses. for about half of all small firms, credit