– plus 12 regional reserve banks that span the country. for example, the district overseen by the new york fed includes all of new york, the 12 northern counties of new jersey ; fairfield county, connecticut ; puerto rico and the u. s. virgin islands. each reserve bank is distinct, with its own charter and a board of directors drawn from its district, but overseen by the board of governors. the law that created the federal reserve made the central bank independent so that policymakers could make decisions about monetary policy – such as whether to adjust interest rates – in the national interest, somewhat insulated from political pressure. however, the fed is accountable to congress. congress has set an explicit objective for monetary policy : to pursue the highest level of employment consistent with price stability. this objective is often referred to as our “ dual mandate, ” because it combines two goals : high employment, and low and stable inflation. in order to promote these objectives, we also pay close attention to financial stability, because without financial stability, it is very hard to achieve our goals for jobs and inflation. the fomc consists of the board of governors plus the presidents of each of the 12 district banks. it meets in washington, d. c., eight times per year to deliberate and vote on monetary bis central bankers ’ speeches policy. as the current new york fed president, i am vice chairman at these meetings. at these meetings, each committee member presents his or her current outlook for the economy. for these assessments, we augment input from our research departments with critical information about local economic conditions supplied by our boards of directors, regional advisory councils and conversations with local stakeholders. my visit to puerto rico today is a part of these regional activities, in which i learn first - hand about the economic and financial conditions important to puerto ricans. one thing that makes my job even more interesting is that new york has some roles unique within the fed. for example, the new york fed is the reserve bank charged with implementing monetary policy. this means that at the direction of the fomc, we buy and sell treasury securities. we are also the eyes and ears of the fed on wall street, and we supervise many of the largest financial institutions in the country. we operate fedwire® – the conduit for large money transfers between banks. and, we provide banking services to the u. s. treasury, and central banks and governments from around the world. finally, i must mention that the new york fed

. in the view of the bis, “ given the swings of mood in these markets, the authorities might at certain times find it relatively easy and inexpensive to lock in longer - term foreign currency loans for later use. finally, countries might then make use of the recently announced contingent credit lines offered by the imf. in conjunction with similar private sector arrangements, this would be a joint testimonial to the soundness of the country in question and could contribute materially to the avoidance of contagion problems ”. in a somewhat similar vein, chairman greenspan expressed a view that countries could adopt a “ liquidity - at - risk ” standard to manage their exposure to financial risks. this standard would give the ex ante probability that a country would avoid new borrowing for one year, based on the level of reserves. in india, we have been steadily building up reserves by encouraging non - debt - creating flows and de - emphasizing debt - creating flows. india ’ s foreign exchange reserves have been steadily increasing over the years. for instance, the last three years saw increases in reserves in the range of $ 4. 7 billion in 1996 / 97, $ 2. 9 billion in 1997 / 98 and $ 3. 1 billion in 1998 / 99, i. e. a cumulative $ 10 billion. however, between end - march 1996 and december 1998, india ’ s total external debt increased by a mere $ 2 billion. our policy of building and maintaining an adequate level of reserves while at the same time constraining debt, especially short - term debt, will continue though we would continuously monitor the international debate in this regard. maturity pattern in many emerging countries, with deregulation and liberalisation, adequate attention has not been paid to the maturity profile of the external debt portfolio. in fact, in some cases, even information gathering on this subject was dispensed with as part of deregulation. determining the maturity was a micro decision left to the final borrowers, whose main consideration was cost. thus, borrowers in many emerging market economies have tended to borrow short with a view to minimising cost. creditors lent short - term since they expected their claims to mature quickly. the recent crises showed that this could be risky. the policy dimension relating to an appropriate maturity structure, which was earlier viewed as a micro decision, is now being recognised as a macro aspect and a stability issue. elongation of the average maturity ensures a sort of private sector burden sharing in times