of ceos over 250 times that of the average worker in 2005, having risen from around 100 times in 1995. in 1999 eddie george likened the change in the city since big bang to wimbledon. 4 the uk still prospered by providing the venue even though most of the players were foreign. today i think the premiership may provide an even better analogy. that is partly because foreigners now own an increasing number of the venues as well as supplying many of the players. that is a striking illustration of britain ’ s openness to foreign ownership which sets it some way apart from most other countries both in europe and america. but it is also because both the city and the premiership have become the centres of global industries with a dramatic impact on revenues and on earnings. one of my first footballing heroes was johnny haynes, the david beckham of his day as a passer of a football. in the 1960s he became the first player to earn £100 per week ( roughly £1500 in today ’ s terms ) in the british game which was then about four times the average male wage. top premiership players now earn more than 200 times the average wage. what has changed is the fact that pay is now being set in a world market. we have in the premiership as in the city some of the best paid people in an international industry which is developing rapidly. we have imported the top of the world earnings scale and at a time when the stretch at the top world wide is increasing very fast. just as in the premiership, the stars of the city – the people who have not just the talent but the recent experience and networks to perform at the top level today – can command a high proportion of the returns from being at the hub of the industry. the growth of hedge funds and private equity can be seen in part as a move by the small group who have sufficient expertise in new instruments and markets to take more of the returns on ownership. 5 to sum up so far, internationalisation and technology favour the clustering of financial markets in london so we should expect london to continue to prosper relative to the financial industry worldwide and to the rest of the uk economy. that will tend to reinforce the trends of recent years with : • a continuing shift of resources into the financial markets and into london itself, • a continuing pressure for higher rents and rewards for those with the right combination of talent and experience, but also • a strong cycle in profits, pay and employment. e george, " before the millennium : from the

risks of substantial magnitude – including derivatives positions with a current total notional value exceeding one trillion dollars – still remain in force at fp, meaning that not millions but billions of taxpayer dollars are potentially at stake as the orderly wind - down of fp continues to progress. the winding down of these risk positions at fp is a delicate and complex matter with systemic implications for the u. s. and global economy. our oversight of this riskreduction process remains a top priority. with respect to the retention awards owed to fp employees under their pre - existing contracts, we believe that mr. liddy weighed a number of factors in deciding not to attempt to prevent payment, including : • the likely negative effects of disruption in staffing at fp in managing its multi - billion dollar exposures ; • legal advice that the contracts were valid – meaning that breaking them would likely increase the amount of company funds ultimately paid to the covered employees ; and • the negative consequences to aig's business that could result from the public abrogation of contracts. in conducting our oversight as lender, the new york fed did not see reason to disagree with mr. liddy's judgment from a risk perspective. equally important, we did not think it was legally permissible – or within the proper role of the new york fed – to attempt to substitute our judgment for that of mr. liddy in this circumstance, even though we found the payment of the retention awards extremely distasteful. the broad public disapproval of sizeable retention payments being directed toward the unit most responsible for last fall's downfall of aig is understandable. americans naturally feel outraged when confronted with news of such payments to an entity that worsened the financial crisis and that is dependent on taxpayer funds to stay out of bankruptcy court where these contracts would not have been fully honored. moreover, the payments occurred during a time when so many americans are struggling to find jobs, seeing their wages reduced or watching their retirement savings plummet as a result of a crisis they had no hand in creating. this feeling of outrage underscores the urgent need to reform the system of compensation at our financial institutions to more closely align the incentives of executives, owners and taxpayers. congress saw fit to impose appropriate compensation restrictions on recipients of troubled asset relief program ( tarp ) funding, and we think it is crucial for congress and the u. s. department of the treasury to continue to craft effective and sensible policies in this area. although oversight of