the shift to a risk - focused approach to supervision, the federal reserve integrated information technology reviews into safety and soundness examinations. this assures that the information security booklet can be accessed at the ffiec web site under the information technology examination handbook infobase at http : / / www. ffiec. gov. our evolving understanding of the elements of operations risk is reflected in supervisory assessments of the adequacy of risk management across the entire enterprise. i hope that you are already familiar with the supervisory expectations in the information security booklet. i would also like to remind everyone of the importance of securing customer information. this privacy requirement goes beyond the it systems themselves to the output of those systems. distributed processing means paper copies of customer information tend to proliferate. information security should include protection of paper documents, including their safe disposal, so that customers'private information does not inadvertently fall into the wrong hands. on the physical security side, i am aware that some of you have had to step up physical security protocols to ensure that your facilities and staff are protected. over the past year, we have had several occasions when the government raised the threat level to orange ( high ). responding responsibly to physical threat warnings is costly and can be confusing, but it cannot be avoided. the department of homeland security has provided some general guidelines on how to adjust security measures to its threat - level warning system. industry groups have been sharing information on the measures they plan to take at various threat levels - including measures to protect staff by conducting operations from homes or back - up locations. this discussion has led to a greater awareness and commitment by financial institutions to ensure that all practical measures are taken to protect employees and facilities. i commend the industry for the work it has done in responding to homeland security issues. i hope you will continue to share information on ways to protect your businesses in the post - september 11 environment. i also suggest that you make every effort to coordinate with local protection authorities so that they are aware of your special needs and you understand their emergency protocols. allowance for loan and lease losses finally, i want to talk about two accounting and reporting issues. financial regulators want to encourage banking organizations to strengthen their processes and documentation associated with their determination of the adequacy of their allowance for loan and lease losses ( alll ). as you know, accounting standardsetters recently questioned the methodology for loan loss reserves and proposed new guidance. the good news is that they now recognize that reaf

of governments to return to sustainable public finances, reduce risk premia in interest rates and thus support sustainable growth over the medium term. for all euro area countries, the 2011 budgets need to reflect the commitment to ambitious fiscal consolidation in line with countries ’ pledges under the excessive deficit procedures. any positive fiscal developments that may emerge, reflecting factors such as a more favourable than expected environment, should be exploited to make faster progress with fiscal consolidation. the urgent implementation of far - reaching structural reforms is essential to enhance the prospects for higher sustainable growth. major reforms are particularly needed in those countries that have experienced a loss of competitiveness in the past or that are suffering from high fiscal and external deficits. the removal of labour market rigidities and the strengthening of productivity growth would further support the adjustment process of these economies. increasing product market competition, particularly in the services sectors, would also facilitate industrial restructuring and encourage innovation and the adoption of new technologies. we are now at your disposal for questions.