1990s. bond - rating downgrades have subsided, and upgrades have picked up to levels normally associated with economic expansion. the narrowing of spreads also reflects the outlook of investors for sustained strength in sales and profit growth. the continuation of efforts to address the accounting and corporate governance scandals of the past few years also serves to increase investors ’ comfort with providing capital to firms with reasonable premiums for risk. these four factors all suggest that financial conditions are capable of supporting sustained, solid growth of the u. s. economy. the much - improved profitability can help finance expansion directly out of internal funds or indirectly by supporting firms ’ borrowing capacity. furthermore, firms will be able to draw on the liquid assets that they have accumulated over the past couple of years. of course, profit margins are likely to recede from their current high levels as labor and other costs pick up and productivity growth moderates. even so, given the successful efforts to pare costs, firms are set to benefit from new investment in plant and equipment. anti - tying restrictions on banks finally, i want to discuss the nature of anti - tying regulations for financial institutions, an issue that can be very confusing to nonbankers. as innovations create new financial instruments, services, and markets, and as banks expand the scope of the financial services they offer, the process of making business decisions for banks is similar to the process many of you apply in your own business. financial institutions are trying to build customer loyalty by offering a broader menu of financial services to corporate customers. the concern addressed by anti - tying restrictions is that banks may force customers to take unwanted products to obtain needed services. as a brief background, the special anti - tying statute that applies to banks generally prohibits a bank from conditioning the availability or price of one product on a requirement that the customer also obtain another product that is not a traditional bank product from the bank or an affiliate of the bank. for example, a bank may not inform a customer that the bank will provide the customer a loan only if the customer engages the bank ’ s securities affiliate for an underwriting or obtains some other product or service that is not a traditional bank product from the bank or an affiliate. the words “ that is not a traditional bank product ” are important. not all tying arrangements are illegal ties. the statute and the board ’ s regulations expressly permit a bank to condition the availability or price of a product or service on a requirement that the customer also obtain one or more traditional bank products from

enrollment rates have picked up noticeably among individuals aged 25 and over. presumably, many of these older students are striving to keep pace with the new demands evolving in the job market. indeed, an important aspect of the changing nature of jobs appears to be that an increasing number of workers are facing the likelihood that they will need retooling during their careers. the notion that formal degree programs at any level can be crafted to fully support the requirements of one ’ s lifework is being challenged. as a result, education is increasingly becoming a lifelong activity ; businesses are now looking for employees who are prepared to continue learning, and workers and managers in many kinds of pursuits have begun to recognize that maintaining their human capital will require persistent hard work and flexibility. 2 peter cappelli, “ are skilling requirements rising? evidence from production and clerical jobs, ” industrial and labor relations review ( april 1993 ), pp. 515 - 530 ; and “ technology and skill requirements : implications for establishment wage structures, ” new england economic review, special issue on earnings and inequality ( may / june, 1996 ), pp. 139 - 154. 3 david h. autor, lawrence f. katz, and alan b. krueger, “ computing inequality : have computers changed the labor market, ” national bureau of economic research working paper 5956 ( march 1997 ). economists have long argued that more than half of the market human capital produced in a worker ’ s lifetime is produced on the job4. several decades ago, much of that on - the - job training was acquired through work experience ; today we are seeing greater emphasis on the value of formal education and training programs for workers. developing human capital is perceived by many corporations as adding to shareholder value. if idea creation is increasingly the factor that engenders value - added, then training and education are crucial to the growth of company value - added and profitability. in the private sector, a number of major corporations have invested in their own internal training centers - - so - called corporate universities. some labor unions have done the same. more broadly, recent surveys by the bureau of labor statistics and by the department of education indicate that the provision of education on the job has risen markedly in recent years. in 1995, the bls report showed that 70 percent of workers in establishments with 50 or more employees received some formal training during the twelve months preceding the survey. most often this training was conducted in house by company personnel, but larger firms also