risk and performance are flawed. in understanding the drivers of good risk management, qualitative factors are a critical influence on the reliability and characteristics of the “ data ” used to evaluate risk and performance. in this broader sense, “ data integrity ” can refer not only to the consistency, accuracy and appropriateness of the information in the data base and model, but also to the processes that produce and utilize these measures. used this way, “ data integrity ” includes the quality of credit files, tracking of key customer characteristics, internal processes and controls, and even the training that supports them all. when one says “ data integrity ” in risk - management circles these days, most people think of the qualifying standards for the internal - ratings - based approaches to credit risk capital under basel ii. i think it is a broader concept, so let me spend a moment on that subject. the proposed timetable for us implementation of basel ii reflects the requirements of our rulemaking processes and the need for banks and supervisors to prepare for the introduction of the new standards. as you probably know, the us banking agencies envision formal release of the proposed regulations in mid - 2005, with parallel running of basel i and basel ii in 2007 and full implementation in 2008. even on that timetable, the regulatory community recognizes that substantial data limitations may prevent banks from developing viable and robust parameter estimates in the near term - even for probability of default in some cases. for this reason, both banks and their supervisors will have to wait while data accumulate before banks can estimate and validate parameter inputs in a reliable, robust manner. in the interim, banks and supervisors will have to rely heavily on qualitative validation approaches although not entirely. supervisors across countries are working together to address validation issues, and, i believe, will develop useful guidelines for banks and supervisors alike. in the early years, more weight may need to be placed on qualitative reviews of a bank ’ s internal policies and procedures, including its internal validation and documentation. but we expect that, soon after implementation, banks should have the ability to generate the needed parameters from actual data, and supervisors will want to see positive steps being taken by banking organizations to develop good databases to provide the sort of data integrity i am discussing. qualitative and quantitative benchmarking studies, which compare methodologies and parameter estimates across banks, will be important tools for validation and for encouraging the diffusion of best practices throughout the industry during both the initial, more qualitative and the later more quantitative

psa campaign, the board developed a 5 tips flyer regarding foreclosure - rescue scams that provides essential information in an easily digestible format. material developed by the board is now being leveraged by others. several reserve banks, for instance, are working to add the board's psa to additional theatres in their markets. and one reserve bank has decided to replicate the effort with a psa tailored to its particular market. in addition, the psa and 5 tips have been picked up by other public and nonprofit organizations, including the national association of realtors, and mortgage servicers such as gmac. the success of this campaign has highlighted the demand for timely information that consumers can use. through this effort, we have learned a great deal about the importance of the federal reserve as an unbiased source of consumer information. we intend to build on this knowledge going forward – focusing on the content provided, leveraging the same message through multiple distribution channels, and creating awareness of the information's availability. finally, as a research institution we engage in efforts to measure the effectiveness of financial education, in order to understand what approaches work best. for example, board staff, working with the department of defense and others, conducted a longitudinal study involving soldiers at fort bliss to determine whether receiving a two - day financial education course as part of their advanced individualized training improved the soldiers'financial behaviors compared to those who did not receive training. we found that soldiers who took the course were more likely to engage in positive financial behaviors ( such as saving regularly, participating in retirement programs, and paying off credit card bills monthly ) and less likely to engage in negative behaviors ( such as paying overdraft fees and paying bills late ). the federal reserve bank of philadelphia is currently engaged in a longitudinal study to measure the effectiveness of homeownership counseling. throughout the federal reserve system we continue to study and apply the lessons learned in the field of behavioral economics to improve our financial education and consumer information. the goal of each of the federal reserve's actions with respect to consumer protection has been to restore consumer confidence by making credit more transparent and, where necessary, prohibiting practices that are so complex as to be unfair and deceptive. these actions are not only good for consumers, but will benefit the financial industry. we aim to promote access to responsible credit for consumers to the greatest extent possible while also recognizing the value of innovation and the need to restore fully functioning credit markets. being attentive to