careful planning of growth and funding needs is a key aspect of sound management and requires the appropriate degree of management attention. conclusion the past year was a good year for the industry, one in which banks were able to adapt to a changing environment and still generate record profits. community banks once again demonstrated their value to the marketplace and the prominent and vibrant position they rightly occupy in the industry. the industry is strong and resilient, but we should not gauge the industry's ability to withstand and adapt to challenges solely on the basis of what happened in 2003. as we reflect on this banner year, it will serve us well to bear in mind that the credit and business challenges the industry faced in recent years were certainly not as difficult as they might have been - and indeed may yet be at some point in the future. asset quality certainly was an issue in this credit cycle, but never approached the levels experienced in the early 1990s. similarly, a low - interest rate environment, together with a steep yield curve, can provide a forgiving setting for bankers, at least in the near term. to paraphrase the old adage, those who do not learn all of the lessons of history are destined to repeat them. once again, the fundamental management challenge is to balance the opportunities of the present with the prospects for the future.

to the plate. finding the right path in life, more often than not, involves some missteps. my federal reserve colleagues and i experienced this as we struggled to address a financial and economic crisis that threatened the global economy. we brainstormed and designed a host of programs to unclog the plumbing of the financial system and to keep credit flowing. not everything worked but we kept at it, and we remained focused on the task at hand. i learned the lesson during this period that one ’ s response to the inevitable setbacks matters as much as the balance of victories and defeats. there is an unfortunate myth that success is mainly determined by something called “ ability. ” but research indicates that our best measures of these qualities are unreliable predictors of performance in academics or employment. psychologist angela lee duckworth says that what really matters is a quality she calls “ grit ” – an abiding commitment to work hard toward long - range goals and to persevere through the setbacks that come along the way. one aspect of grit that i think is particularly important is the willingness to take a stand when circumstances demand it. such circumstances may not be all that frequent, but in every life, there will be crucial moments when having the courage to stand up for what you believe will be immensely important. my predecessor at the fed, chairman ben bernanke, demonstrated such courage, especially in his response to the threat of the financial crisis. to stabilize the financial system and restore economic growth, he took courageous actions that were unprecedented in ambition and scope. he faced relentless criticism, personal threats, and the certainty that history would judge him harshly if he was wrong. but he stood up for what he believed was bis central bankers ’ speeches right and necessary. ben bernanke ’ s intelligence and knowledge served him well as chairman. but his grit and willingness to take a stand were just as important. i hope you never are confronted by challenges this great, but you too will face moments in life when standing up for what you believe can make all the difference. having dwelt for a moment on failure and grit, let me turn to the deeper meaning that underpins grit and can carry us beyond failure. the hard work of building a life that makes a difference is much easier to sustain when you are passionate about what you pursue. when i first came to the federal reserve 37 years ago, i was struck by the passion of my colleagues for the mission of the fed. and these many years later