in the united states would occur only after ( 1 ) we had reviewed all public comments and incorporated any needed adjustments to address legitimate concerns and ( 2 ) we were satisfied that basel ii was consistent with safe and sound banking in this country. throughout this process we have stressed that, if we become concerned about the level of overall capital in the banking system or the capital results for individual portfolios, we would seek to modify the framework, including - should it come to that - possibly recalibrating the regulatory capital formulas that translate an individual bank's risk parameters into minimum required capital. the agencies'current review and study are consistent with our historical position at basel. complexity in basel ii one often hears that the advanced approaches of basel ii are " too complex " for anyone to understand, and the mathematical formulas in various drafts of the guidance can look like a foreign language to some readers. attendees at this conference clearly understand that large, internationally active financial institutions have become more complex in terms of both sophistication of services and business practices, as well as organizational structure. as a result, effective risk management has been evolving to support these innovative financial structures. indeed, basel ii may not look that complex to many of you here today, given your experience with more - sophisticated risk and internal economic capital models. so you would probably agree with me that even before basel ii is adopted, most banking organizations involved in complex financial instruments should already possess an understanding of advanced risk concepts and should have implemented effective risk - measurement and - management practices. as prudent supervisors, all of the u. s. banking agencies require any organization employing sophisticated financial practices or using complex financial instruments to have a governance and control structure commensurate with those activities. that is, the bank must have knowledgeable staff to set risk limits effectively and clearly communicate them to executive management and their boards of directors, must have acquired and implemented effective mitigating controls, and must have a robust process for monitoring exposures. that is one of the reasons that in the united states we are proposing to require only the largest, most sophisticated financial institutions to adopt basel ii - and only the advanced approaches. these institutions recognize that complex operations require a more - structured and well - defined risk - management framework to monitor the effectiveness of internal control processes and risk exposures. for these organizations, the incremental cost of adopting basel ii advanced approaches, while admittedly significant, should be relatively modest compared with the significant risk - management investments they have

economics that began only after other avenues had been explored. i want to make sure you know that even if you have not specialized in economics as an undergraduate, it is not too late to join. we need economists with diverse experiences and backgrounds, just as we need other sources of diversity. for what it is worth, i did not major in economics as an undergraduate, and i worked for several years in the private sector before i decided to pursue a doctorate in economics. i am glad i did. i enormously value the intellectual framework associated with economics, and my career has provided terrific opportunities both to range far afield and to work within the field. in short, i hope you will think of economics not as shutting doors on other opportunities, but rather as equipping you to pursue a whole new set of opportunities. given the benefits i have described to the profession and society from increasing diversity in the ranks of economists, as well as the opportunity a degree in economics affords to individuals who pursue the field, it makes sense to look closely, as the aea and others continue to do, at the reasons more women and minorities do not concentrate in economics in college or depart from economics as they move toward graduation. to the undergraduates in the audience today who are participating in the summer program, i would be interested to hear what you believe may be discouraging women and minorities from choosing economics in school and careers, so that we can take steps to reduce any barriers. the aea and other groups are rightly focused on what universities and other institutions can do to promote diversity in economics. let me now direct my attention to diversity at my institution, the federal reserve, because it is both one of the largest employers of phd economists in the country and a prominent public institution. the share of women and minorities among economists at the fed is similar to the numbers for the profession at large, and these numbers have likewise improved fairly little since 2009. something that has changed over that time, however, is the elevation in importance of diversity efforts, including recruitment. the board of governors is making considerable effort to recruit and retain economists who are women and minorities. we are working hard at recruitment at the earliest stages of the career - formation process. every year the board hires 50 to 60 research assistants ( ras ) for two - year terms ; the 12 reserve banks together hire roughly an equal number. our research assistant program is to some extent an apprenticeship program for economists and also for financial analysts and those in related fields