the country, the region is showing signs of a modest recovery. a more diversified, more knowledge - based economy and a relatively small housing sector helped to limit the recession ’ s impact on many communities. nevertheless, the great recession spread much pain throughout this region and unemployment remains much higher than we would like. the fed cannot wave a magic wand and make the problems remaining from the preceding period of excess vanish immediately. but we can provide essential support for the needed adjustments. even with our best efforts, the road to full recovery here in upstate new york and across the nation is likely to be long and bumpy. but i am confident that we will make it. and, the dynamism that is represented in this room – the private sector combined with academic learning and research – will provide a strong underpinning for future prosperity. thank you for your kind attention. i will now be happy to take some questions.

christine m cumming : comments at the 10th anniversary of cls remarks by ms christine m cumming, first vice president of the federal reserve bank of new york, at the celebration of the 10th anniversary of cls, new york city, 17 april 2013. * * * i am honored to be here tonight to speak on the occasion of the 10th anniversary of the founding of cls. today, it ’ s hard to recreate the shock created by bankhaus herstatt ’ s failure in 1974 and the revelation that even a relatively small, internationally active bank could pose such substantial financial risk to participants in the foreign exchange market. herstatt ’ s failure was just one of several shocks in the early 70s that signaled the end of two plus decades of relatively tranquil recovery and growth after world war ii. another notable shock of those years, of course, was the breakdown of the bretton woods foreign exchange arrangements and the introduction of substantial and unfamiliar volatility to the foreign exchange markets. a saving grace was that the foreign exchange community has had the great good fortune over the decades to be led by participants who recognized the importance of a healthy, resilient and change - friendly marketplace and worked collaboratively to achieve that. over the years, the foreign exchange community also forged bonds with central banks in major financial centers to promote foreign exchange market health. it has been a great model of public - private cooperation made possible by private - sector leadership. despite all that, foreign exchange market participants and central banks in 1974 found herstatt risk to be an intractable problem. all that was left to banks was to manage it. and so it went for 20 years. then, in the mid - 1990s, bill mcdonough, president of the new york fed, identified the continued existence of herstatt risk as a challenge to be met. as chairman of the committee on payments and settlement systems of the g - 10 central bank governors, he spurred the central bank community to take a fresh look. this time, the combination of new financial analysis and the rapidly expanding availability of raw computing power made the difference. • in what today still stands as a landmark in analysis of the connection between operational and financial risk, the 1996 allsopp report demonstrated in a straightforward manner just how much financial risk existed in the bilateral settlement of gross principal amounts of foreign exchange – an analysis that provided the insight into how a settlement facility could reduce that risk, and into understanding how settlement management could improve in the interim