will do the same. 2 / 3 bis central bankers'speeches i mentioned earlier that we also need to reform incentives in order to encourage people to speak up. this is hard. i ’ ll share with you some of the change we have made at the new york fed, recognizing that we do not have a monopoly on good ideas, nor can we claim to have a perfect culture. skip - level meetings are common, and occur for the purpose of providing forums for sharing ideas. they are also a signal that escalation of problems matters to us. we offer training for new employees that emphasizes the importance of cognitive diversity and speaking up. we evaluate employees on their level of engagement with colleagues and their willingness to share insights. so, part of getting promoted is contributing diverse views and raising your hand. we have created programs to encourage peer recognition of good ideas, including backing for actionable initiatives selected by staff. this resulted, for example, in ideas like a “ share your story ” series to create institutional memory of past experiences and lessons learned. none of these ideas is a panacea. and, i know that we have not yet achieved our goal : a culture in which employees perceive that, by raising their hands and challenging what may be an orthodoxy or conventional wisdom, they are contributing to the mission of the new york fed. i hope, however, that with the right incentives and good leadership models, we can move closer to that ideal state : an organization characterized by fresh ideas and open dialogue. at conferences like these, we tend to focus on the cost of misconduct. but, getting rid of scandals should not be the sole reason for changing culture. 3 the public expects more from the financial sector than a lack of another financial crisis or scandal. the industry would do well to listen to baroness onora o ’ neill : think about your purpose. 4 what are you for? surely, no one would answer that question by saying, “ we ’ re for a lack of misconduct. ” rather, the financial services industry should support a well - functioning, growing economy, reflecting the interests of all its stakeholders. banking in particular should provide critical intermediation services — the economic infrastructure that allows businesses to grow, families to save and invest, and standards of living to improve over generations for as broad a cross section of people as possible. when society prospers, the financial services industry prospers, too. creating a culture that encourages and rewards diversity of thought, perspective, and experience is

the issue of unintended consequences. one that comes to mind is creating a culture of distrust and suspicion, where everyone looking over his or her shoulder. that would be unfortunate and costly. but, i think it is more likely that a different culture will result. instead, talented and conscientious people will be happy to remain at a firm or in the industry because their personal and professional values are well aligned. such employees will feel relief that they can speak up without fear of reprisal, and they can enjoy a clear conscience for having done the right thing. there is significant value in being able to sleep well at night. moreover, being receptive to diverse and dissenting views will likely yield better results. it is in the industry ’ s self - interest to deter silence, not only because money will be saved on fines not incurred for misconduct, but also because better ideas will be brought to the table. i believe that business performance will benefit from having a culture in which people feel empowered to speak up. let me give you a few examples from my own experience at the new york fed. i want employees to speak up. that ’ s why, at the start of my tenure as president, i made it clear that i wanted the “ best idea to win, ” regardless of where it originated or whether it contradicted something that i thought. in some instances, that will require people to admit mistakes. in that regard, i have to set the example that we all make mistakes, and that recognizing and addressing them head on — and, importantly, learning from them — is the best approach. a few years ago we created a new group at the new york fed called integrated policy analysis. its purpose was to consolidate teams from many parts of the organization to develop a more integrated view of the economic and financial environment to help inform our policy responsibilities. i was a strong advocate for the idea. but, after two years of effort, it became clear to me and others that it was not working as well as we had hoped. there were a lot of reasons for that, and in the end we dissolved the group and reassigned the work and staff. i let our employees know that i took a calculated risk and it didn ’ t work out. by doing this, i aimed to show that when things do not go as planned, the best approach is to address it, not to be silent. i hope that, when our people are confronted with disappointing results in their work, they