. some answers are more judgmental than empirical. experience, judgment, and a sound degree of prudence are all important. in the old days, banking was often a smaller and certainly less complex business. in this smaller scale, management could gain a more direct “ feel ” about their customers, their exposures, and the related risk. and the potential consequences of making mistakes were typically small as well. if the bank had a bad loan underwriter, it could dismiss the person and proceed to clean up the mess. as many banking organizations have grown into much larger and far more complex institutions, that personal feel often gets lost. their managements need the more sophisticated and systematic processes that risk modeling can provide, but they also need to ensure that an incorrect or weak model does not bring down the house. i would offer that success in this area often requires grey hair and keen intuition as well as highly developed analytical skills. beyond these points, accounting and disclosure practices must be considered as they relate to such matters as earnings volatility, customer suitability, and the incentives or disincentives they provide to risk managers. fundamental elements of corporate governance must also be adequately addressed and they naturally become more challenging as activities become more complex. nevertheless, they cannot be ignored, given the corporate scandals of recent years and the legislated remedies that followed. recent failures of corporate governance - whether at enron, parmalat, or the new york stock exchange - have changed the landscape underlying many transactions conducted by financial institutions. the implications of the sarbanes - oxley legislation are now being felt throughout corporate america and are proving to be expensive to many firms. how much better, for all, had these few corporations behaved more responsibly all along! responsible self - governance and sound corporate governance are much better and far less costly than rigid governmental - imposed rules. a greater awareness of business ethics and a reshaping of accounting practices and incentive packages should help. but risk managers must also play an active role in focusing on sound practices, and not just on expedience. accounting, disclosure, and market discipline revelations of significant corporate governance and accounting failures, with parmalat being the latest example, demonstrate that strong accounting, effective internal and external auditing, and transparent disclosure practices are critical concerns worldwide, not just in one part of the world, such as the united states. events at the international level have renewed attention to the need for companies worldwide to implement high - quality corporate governance practices

monetary policy. as part of this effort, i provide a comprehensive update on my outlook for the economy and monetary policy several times during the year. once a year we publish our staff ’ s judgmental economic forecast. we have also provided in the liberty street economics blog discussions of an internal staff modelbased economic forecast. in addition, we now regularly release our real - time forecast of “ current quarter ” real gdp growth. all of these help the public to understand our assessment of economic conditions through the lenses of these different types of forecasts. when asked about the trajectory for the monetary policy stance, i always point out that it is data dependent. the fomc calibrates the stance of monetary policy to best achieve our twin objectives of price stability and maximum sustainable employment, taking into account our forecast for how the economy is evolving. this forecast reflects the ongoing flow of the data. data releases that are close to our expectations have little additional impact on the forecast, while data releases that deviate significantly from our expectations can lead to more significant revisions of the forecast. it is, therefore, important for market participants and households to be able to follow the data along with the fomc and to understand how we are likely to interpret and react to incoming data. while market analysts readily have access to economic and financial data, this access is not widely available to everyone. to help fill this information gap, for the past year we have been bis central bankers ’ speeches making available on our website a monthly publication called u. s. economy in a snapshot. this publication contains a set of key data charts as well as commentary by our staff economists. the purpose is to provide interested readers easy access to clear and concise presentations of important economic information. the associated commentary provides some pertinent observations one might draw from the data. our goal is to provide information that helps households and businesses follow the data along with the fed. if people know more about how the economy is performing and how that is likely to influence our actions, this should make it easier for us to achieve our twin objectives. i will now turn it over to rob to discuss the snapshot in greater detail. bis central bankers ’ speeches