support economic growth. let me also tell you a bit about how we are contributing “ on the ground ” here in puerto rico. i mentioned financial literacy a few minutes ago. the federal reserve system and the new york fed have taken a great interest in economic education and financial literacy and will continue to do even more in the future. i, personally, believe that financial literacy is essential so that households can make the type of good financial decisions that help to ensure better futures. the new york fed, along with many financial institutions and foundations in puerto rico, has created and supported the economic and financial education alliance of puerto rico. over the past ten years, the alliance has trained more than 400 high school teachers in economics and financial literacy. i would like to personally thank all the institutions whose devotion to this alliance has made these education efforts possible. these teachers take what they learned back to the classroom and many of their students enter the federal reserve economics competition. the students apply analytical skills to a local problem of their choosing and work as a team to create a presentation outlining their solution and responding to questions. the winning team develops skills – in analysis, presentations and teamwork – that will help them in their future studies and careers in the knowledge economy. the new york fed is also supporting the office of the commissioner of financial institutions in its two - week expo, where last year 20, 000 people saw presentations and received financial counseling. we have also had a productive relationship with our good friends at the puerto rico bankers association. each year during “ community reinvestment act week, ” our staff highlights new ideas and products especially suited to the puerto rican market. for example, this november we held a forum for puerto rican and u. s. virgin islands financial institutions, state and local governments, and nonprofit organizations to introduce “ bank on, ” a financial product proven to attract under - banked people into the financial mainstream. since then, several local banks have formed a group to explore how to best implement it here. another example of collaboration is our work with the bankers association and local universities. during the fall, we held a “ financial awareness video contest ” for college students. this pilot project explores building peer - to - peer financial awareness among young adults by having contestants create a 90 - second video. we look forward to hosting the first place winners during their trip to new york in the spring. to improve our understanding of the puerto rican economy, the new york fed has joined a group of local businesses – including

perhaps fewer intragroup exposures than it otherwise would have. resolution planning as i mentioned at the outset, the financial crisis validated for many concerns about the adequacy of measures to resolve large financial firms without high costs and destructive externalities. the lehman bankruptcy reminds us that every financial institution is resolvable, but at a cost. the major elements of cost are the considerable expense of insolvency, the substantial loss of value through any excess, “ fire sale ” markdown of the value of assets and business lines and the externalities of a large failure to other firms, their stakeholders and market participants in the form of knock - on and psychological effects. when the observation is made that a financial institution is not resolvable or is too big to fail, it represents a judgment that the financial costs and externalities of failure are unacceptable. the desire to improve the resolution process for cross - border financial firms is widely shared, but how we should we judge progress? the success of private and public sector actions, such as those recommended by the cbrg, to improve the resolution of systemically important firms can perhaps be gauged by the extent to which resolution costs are reduced. we might further gauge progress against additional expectations, such as the absence of taxpayer support of the resolution process, the efficiency of the process ( to the extent it is not captured in resolution costs ) and the equitable and consistent treatment of stakeholders. to improve the resolution process, the cbrg ’ s first recommendation is that national authorities have appropriate tools to deal with all types of financial institutions in difficulties so that an orderly resolution can be achieved. the recommendation specifically mentions power to create bridge financial institutions, transfer assets, liabilities and business operations to others and to resolve claims. the fdic has these powers for banks and thrifts as well as a great deal of experience in managing bank failures and has demonstrated the utility and flexibility of its tools. a positive development is that many countries are considering or have adopted legislation giving the financial resolution authority similar powers. the u. s. dodd - frank act passed in the summer broadens the scope of the fdic ’ s resolution powers, although in a carefully circumscribed manner. the dodd - frank act allows the fdic to resolve not only a bank, but a financial holding company of a banking organization or a nonbank financial institution, if the requisite recommendations and conditions are present, among them, that the failure is a threat to financial stability