richard w fisher : ¡ andale pues! get on with advancing hispanic prosperity through education remarks by mr richard w fisher, president and chief executive officer of the federal reserve bank of dallas, at the hispanic economic experience conference, dallas, texas, 16 june 2011. * * * the views expressed by the author do not necessarily reflect official positions of the federal reserve system. i am here today not simply to say bienvenido and welcome you to the federal reserve bank of dallas with un fuerte abrazo, but to underscore the importance i attach to our achieving a better understanding of the hispanic economic experience and, very importantly, the potential for greater hispanic advancement within the u. s. economy. let me cut to the quick : hispanics are underachieving in our society, especially in texas. here are the data : there are some 50 million americans who identify themselves as hispanics. this number is up 43 percent over the last decade. roughly 66 percent, or some 32 million, self - identify as mexicanos. texas has the second - largest hispanic population, after california : 9. 5 million hispanics, the vast majority of whom are of mexican origin, live here. a majority of them are native born, whereas in the rest of the united states, a majority are foreign born. in other words, the majority of hispanics who live in texas are as american as i am ; some maybe more so, as i am a first - generation american born of immigrant parents. in texas, 38 percent of the population is hispanic versus 16. 3 percent in the u. s. “ jose ” has been the top male baby name in texas every year since 1996, when it replaced “ michael ” and “ christopher. ” we are the only state in the union with a latino baby name ranked number one. those are some basic facts. here are some others for you to consider : for the past 20 years, the eleventh federal reserve district – in which 96 percent of the economic output is generated by texas – has outgrown the rest of the federal reserve districts and the united states by significant margins. we have grown our real – or inflationadjusted output ( real state gross domestic product ) – by 3. 6 percent compounded over 20 years, whereas the rest of the u. s. ( real gross domestic product ) has grown at 2. 5 percent compounded ; annual job growth in texas has outpaced the nation by 1 percentage point a year

2. second, we need to re - examine all aspects of the current regulatory framework to ensure it does not contribute to the intrinsic cyclicality of banking. a number of potential sources of pro - cyclicality need to be investigated, including fair value accounting and leverage, capital requirements and provisioning regimes. looking forward, new mechanisms should be devised to ensure that banks accumulate resources in good times to cushion the shock when the cycle turns. measures could include requiring banks to hold additional capital and liquidity buffers and introducing dynamic provisioning systems that require banks to build up a general reserve that can be drawn on in downturns. market economies inevitably entail cyclical swings ; it is up to regulatory and supervisory bodies to ensure that their regulations and actions do not amplify those swings. 3. third, in recent decades transparency has not matched the increasing level of sophistication and complexity of financial instruments, creating significant gaps in investor information and financial education. these need to be filled with enhanced risk disclosure at all levels, particularly in institutions and markets that are currently unregulated but can – as recent experience has shown – exert a relevant systemic impact. financial regulation should be reviewed to better reflect the role of highly leveraged institutions in particular – namely private equity, hedge funds and special purpose vehicles – and of derivatives markets in general, including, but not exclusively, credit derivatives. regarding the latter, i welcome in particular the initiative to improve the infrastructure of over - the - counter markets by establishing central counterparty clearing for the cds market. let me conclude. in the current, very demanding situation, the swiftness and the magnitude of the decisions taken by central banks as regards the supply of liquidity and the decisive actions taken by governments and parliaments as regards recapitalisation in the financial sector and the provision of guarantees have proved effective in avoiding a meltdown of global finance. but it would be a mistake to underestimate the structural fragility of the present state of global finance and, consequently, of the global economy. this is the heart of the matter : we need a paradigm change in the global economy. the previous paradigm was based on the concept of relatively short - term financial market equilibrium. what we need is a new paradigm. a paradigm based upon the following three fundamental notions. first, the notion of medium and long - term sustainability, which will require us to be much more resolute in distinguishing between the stable equilibria on the one hand and