program ”, press release, may 7 ; and ben s. bernanke ( 2009 ), “ the supervisory capital assessment program ”, speech delivered at the federal reserve bank of atlanta 2009 financial markets conference, jekyll island, ga., may 11. because most large financial firms are multinational, the development of an effective regime will require consultation and collaboration with authorities abroad. the federal reserve strongly supports ongoing congressional efforts to reform our financial regulatory framework, but we are not waiting for new legislation to make improvements. we have been working hard to strengthen our own oversight of financial institutions and to broaden our field of vision to include potential risks to the financial system as a whole as well as risks to individual firms. for example, we have played a key part in ongoing international efforts to ensure that systemically critical financial institutions hold more and higher - quality capital and have sufficient liquid assets on hand to be able to survive a market crisis. and we are leading the international and domestic initiative to push banking organizations of all sizes to ensure their compensation practices link pay to performance and do not encourage excessive risk - taking. to make our supervision more effective and better able to identify risks to the financial system as a whole, we are also making fundamental changes to our daily operations. for example, we have adopted a more multidisciplinary approach that makes better use of the wide range of expertise and skills at the federal reserve – in economics, financial markets, payments systems, and other specialties, as well as bank supervision. we will be doing more cross - firm comparisons to better understand differences in the practices of different firms and the risks they face, and we will be complementing on - site examinations with off - site, quantitative analyses by experts in a range of disciplines. as we improve our supervision, we will be sure not to lose sight of the diversity of our banking system. banks of all sizes, including regional and community banks, make critical contributions to our economy ; thus, we must continue our efforts to ensure the stability and vitality of smaller banks as well as larger ones. as we ’ ve been working to make our supervision more effective, we have also been taking care to ensure we do not inadvertently impede sound lending. businesses need access to credit to maintain or expand their payrolls and make productive investments. banks need to continue to lend to creditworthy borrowers to earn a profit and remain strong. if bankers become overly conservative in response to past lending mistakes – or if examiners force such

demonstrated time and again the inherent resilience and recuperative powers of the american economy. our country ’ s competitive, market - based system, its flexible capital and labor markets, its tradition of entrepreneurship, and its knack for innovation have ensured that the nation ’ s economy has surmounted difficult challenges in the past. i do not doubt that we can do so once again. see herbert stein ( 1997 ), “ herb stein ’ s unfamiliar quotations ”, slate, may 16, www. slate. com / id / 2561.