alone what compliance was going to cost. and now, as a regulator, i still read every rule, guidance, and proposal with the knowledge that the effort expended to understand new regulatory requirements is itself an additional burden. so, in response to a suggestion that was made by one of our cdiac members, we are now working to include, at the beginning of each regulatory proposal, final rule, or regulatory guidance, a statement outlining which banks are affected. in particular, when issuing supervisory letters, we try to state specifically if and how new guidance will apply to community banks. this way, banks won ’ t waste resources on requirements that don ’ t apply to them. sometimes, this statement is relatively simple : for example, many provisions of the dodd - frank act by statute apply only to the largest banks. in cases where the rules apply to all banks, but expectations vary by bank size or the degree to which banks engage in specific activities, it may be more helpful to make distinctions throughout the regulation or guidance. for example, when we proposed interagency guidance covering incentive compensation, we tried to note under each provision the simplified expectations for community banks that did not make extensive use of incentive compensation. also helpful in clarifying supervisory expectations is the use of examples. interagency guidance issued in 2009 covering workouts of commercial real estate ( cre ) loans contained several examples of loan restructurings and how they should be classified. 2 i think the examples helped bankers and examiners alike understand policymakers ’ expectations for the regulatory treatment of loan workouts. still, even with the examples, we heard reports that the guidance was not being implemented consistently in the field. to further ensure consistency, we conducted extensive examiner training. after the training was completed, we conducted a review of hundreds of loan files from recent examinations. our file review indicated that, with very few exceptions, the loans were classified according to the guidance. in addition to the national cdiac that meets with the board, each reserve bank has its own local cdiac that provides a regional perspective to reserve bank management. see http : / / www. federalreserve. gov / aboutthefed / cdiac. htm for more information. see supervision and regulation ( sr ) letter 09 – 7, “ prudent commercial real estate loan workouts. ” http : / / www. federalreserve. gov / newsevents / press / bcreg / 20091030a. htm.

this spring, y2k information about firms and industries was largely sketchy or incomplete throughout the world. in many countries, few firms or sectors were willing to provide information about the year 2000 process or their status relative to national and international benchmarks. failure to disclose caused considerable concern in markets. market participants began to assume that firms and sectors that were not making some type of self disclosure probably were seriously behind in their preparations for the year 2000. this assumption engendered the potential for overreaction by market participants and consumers, including the potential for withdrawal from markets and commercial relationships and other rational and irrational risk - mitigation techniques. i believe that the potential for overreaction has been greatly reduced in recent months because of a dramatic improvement in disclosure and confirmation of readiness through multiparty testing. first, in the united states, the president ’ s council on year 2000 conversion, led by john koskinen, forged unique and successful cooperative partnerships between critical public agencies and related private sectors and made those sectors accountable to the american public through the quarterly release of sector assessment reports. the president ’ s council, established in february 1998, is made up of more than 30 major federal agencies that act as sector coordinators in promoting year 2000 public and private sector action within their respective policy areas. quite simply, the president ’ s council has spurred the government and whole industries to coordinate y2k preparations, set benchmark dates for readiness, and organize and report the results of inter and cross - industry tests. the electric power and telecommunication industries, which are critical to the operation of the financial services industry, are excellent examples of this achievement. neither industry is supervised in the way that the financial services industry is, yet their umbrella agencies – the department of energy and the federal communications commission – were able to energize industry - led groups such as the north american electric reliability council ( nerc ) and the network reliability and interoperability council ( nric ). the results of their efforts can be read in the assessment report released by the president ’ s council last month. as of june 1999, electric power distribution companies ’ serving 96 % of the nation ’ s electricity needs were ready for the year 2000. similarly, as of july 1999, long - distance telecommunications carriers controlling 92 % of domestic calls were 99 % y2k compliant. second, regulators and private - sector firms have been exerting pressure on market participants and commercial firms to provide information about y2k readiness. banks and