is it possible to make the boards responsible for appointment of ceos, and make the board appointments less discretionary on the part of the government in power? i don ’ t want to express a view, but these are real issues. as the resolution of these issues will take considerable time, our task is to see what can be done within the present public sector structure. something can be done – better internal checks and balances, better auditing, better transparency, better enforcement of policies, better action over npas, timely action against frauds. i hope you will give consideration to these in the interim, while we debate the larger issues. as regards the “ insider ” model, there is a tremendous variation both in terms of risk as well as corporate governance structure. by and large, the structure is very weak in co - operatives and nbfcs for historical reasons, local practices, and multiplicity of regulators and laws. old private banks also have very poor auditing and accounting systems. new private banks – generally good on accounting, but poor on accountability. more modern and computerised, but less risk conscious, one thing which is common to all is that corporate governance is highly centralised with very little real check on the ceo, who is generally also closely linked to the largest owner groups. boards or auditing systems are not very effective. so, in all the segments, and all different sizes of institutions, we have a great deal of work to do in the area of corporate governance. rbi has been working on new accounting, auditing and disclosure standards. work is also in progress in setting better internal auditing and better system of checks and balances. a committee of ind. dir. has also been set up under dr. ganguly, member of the bfs to learn from the past experience. rbi and other regulators would do their best to bring about better standards, but ultimately it is upto the individual institutions, and the people managing them to ensure what actually happens on the ground. let me conclude. corporate governance has never been more imp than now. it is not only the business of an individual bank or entity, but of all of us. 5 or 10 years down the line, you would not be able to operate unless we have corporate governance of the best standards. in many areas, we have made progress in laying down what needs to be done. the important task now is to put appropriate mechanisms in place to enforce accountability, asset liability management, early warning and

treasury notes and bonds – eschewing treasury bills. presently, the fed holds more than $ 850 billion in mortgage - backed securities ( mbs ) and over $ 1. 6 trillion in treasuries. this expansion of our portfolio and extension of maturities held therein is known as “ quantitative easing ”, or qe. after cutting the base rate for overnight lending – the fed funds rate – to zero, the majority of the committee decided to expand the money supply by purchasing mbs, notes and bonds. when we buy something in the marketplace, we pay for it, and this has resulted in significant liquidity floating about the u. s. economy, much of it going unused. as mentioned earlier, $ 1. 5 trillion of excess reserves from private banks is on deposit in the 12 federal reserve banks, where it earns a paltry 0. 25 percent, rather than being lent to job - creating businesses at rates bankers would prefer. additionally, some $ 2 trillion of excess cash is parked on corporate balance sheets – above and beyond the operating cash flow needs of the business sector – and copious amounts of cash are lying fallow in the pockets of nondepository financial institutions, such as private equity and other investment funds. a running discussion in the marketplace centers around whether the fomc will decide to engage in further quantitative easing, especially given the most recent economic weakness in the u. s., against the backdrop of the well - known problems in europe and slower growth in china and other “ emerging ” economies. i shall turn to that in a few moments. first, i want to go back to the 12 federal reserve banks. different growth patterns in the 12 federal reserve districts here is a map of the 12 federal reserve bank districts. the federal reserve bank of dallas is responsible for the fed ’ s activity in the light green area – the eleventh district – home to 27 million people in texas, northern louisiana and southern new mexico. roughly 96 percent of the district ’ s output comes from texas. bis central bankers ’ speeches here is a chart showing the disparate behavior of the economies in the 12 federal reserve districts, as measured by employment growth. you will see that going back to 1990 – some 22 years – the eleventh federal reserve district has outperformed the other federal reserve districts in job creation. in terms of employment, the dallas fed ’ s district went into the recession last and was one of the first to come out. we have since