aware of security deficiencies at a participant as part of an assurance program, and the participant subsequently experiences a breach, does the operator incur some measure of liability for any loss? in such a circumstance, what degree of latitude does an operator realistically possess to deny a participant access to services that are essential 4 / 5 bis central bankers'speeches to the participant ’ s ongoing viability? moreover, if an operator detects potentially anomalous transactions coming from a participant, and does not intervene to prevent a transfer that is in fact fraudulent, does the operator assume a measure of liability for the resulting loss? one way in which we have endeavored to manage these concerns is to provide tools and services to participants to manage their endpoint security risks locally, and in a manner that does not inappropriately shift liability from participant to operator, but admittedly these are difficult questions that compel novel thinking to ensure that the legal framework supporting the payment system is sufficiently robust and responsive to the escalating threat environment. an additional, but not incidental, point on endpoint security : i observe a reluctance across the industry to share information about endpoint security experiences for fear that such transparency may expose an individual institution to concerns about its internal information security control environment. this is an understandable but parochial response which, collectively, has the potential to expose a network to considerable risk, especially if it inhibits socialization of known threat vectors and techniques. a solution to this vexing dynamic could be industry - led, operatorled, or supervisory - led. the impulse does not particularly matter ; developing a venue for the coordinated sharing of endpoint intelligence and experience across the industry matters profoundly, and represents a fundamental mutual interest, compelling both leadership and collaboration. conclusion i do not presume answers to these questions, and merely observe that they are important ones to inspire reflection in the collective pursuit of resilience and security for the anchor elements of our nation ’ s financial system. what better venue than the clearing house ’ s payments symposium and annual conference to continue this discussion? in response to this generational challenge, let us be sure not to construct an inflexible maginot line whose rigidities are easily subverted by a creative and nimble adversary. let us instead develop a coherent and integrated system that relies upon the classical elements of defense, but none of them exclusively : perimeter security to keep the adversary outside of the environment ; defense in depth to safeguard our most critical assets ; sophisticated intelligence to understand the

in productivity was not completely unique to the united states, but it has not yet been matched by the other major economies, though that may be in prospect. what accounted for these achievements? this is important to try to understand, because it is important to assessing whether these trends are enduring or temporary, and what types of policies are likely to sustain them. there is no definitive consensus on this question, and economists have an interesting debate underway about how much of this was luck and how much was skill. most observers seem to attribute the record to the following mix of factors. the first, of course, is technology. we experienced during this period the benefits of a powerful technology shock that made possible a revolution in the productivity of investment, in transportation and communication costs, in business methods, in computing power, etc. given the speed with which technological advances are diffused, one might expect the benefits to have been more broadly spread among other economies, but that has not yet happened on a scale that is sufficient to narrow the growth gap. the extent of technological progress and its impact on economic growth were magnified by the openness and flexibility of the u. s. economy. the united states became significantly more open over the past decade, with imports and exports as a share of gdp rising by about 50 percent. this happened in part because of the impact of trade agreements like nafta and the uruguay round that lowered u. s. trade barriers, and in part because we stayed out of the way of the impact of technology and globalization and did not, on the whole, try to insulate the u. s. economy from the pressures of competition. we are by choice significantly more flexible than the other major economies. the major deregulations ( telecom, transportation, finance, etc. ) of the last two decades made us more so. we have relatively limited regulation of business activity, low barriers to entry by new firms, lower hiring and firing costs, and more worker mobility and turnover. a third key factor involves the u. s. financial system. our system has proven to be exceptionally good at matching capital to ideas, at rewarding innovation and penalizing failure, and relatively more resilient to shocks. in comparison to the other major economies, banks are a smaller share of our financial system and the capital markets play a greater role. securitization and other avenues for risk transfer advanced much more rapidly here. the venture capital, private equity and hedge fund parts of our financial system are