further to go to achieve a healthy economy, and i am certain that small businesses will continue to play a critical role in reaching that objective. i am honored to be addressing the owners of 53 small businesses whose excellence exemplifies the enormous contributions that millions of small businesses collectively make to our economy. you come from different places and have achieved success in a wide variety of ways, but you all share the entrepreneurial spirit that has always been central to our nation ’ s prosperity. we at the federal reserve are keenly aware of your vital role, and we pledge to continue to do our part in promoting the recovery so that you can continue to help america grow and prosper. thank you. see bureau of labor statistics ( 2014 ), “ business employment dynamics : third quarter 2013, ” press release, april 29. bis central bankers ’ speeches

: evidence from the financial markets, ” mit sloan school, mimeo, april 1999. the financial accounting standards board ( fasb ) will require that the cost of repricing of options be charged against income starting later this year. the translation of value judgments into market prices is, of course, rooted in how people discount uncertain future outcomes. an individual ’ s degree of risk aversion may vary through time and possibly be subject to herd instincts. nonetheless, certain stable magnitudes are inferable from the process of discounting of future claims and values. one of the most enduring is that interest rates, as far back as we can measure, appear trendless, despite vast changes in technology, life expectancy and economic organization. british long - term government interest rates, for example, mostly ranged between 3 % and 6 % from the early eighteenth century to the early twentieth century, and are around 5 % today. indeed, scattered evidence dating back to ancient rome and before reflects the same order of interest rate magnitude, not a 1 % interest rate nor 200 %. this suggests that the rate of time preference underlying interest rates, like so many other aspects of human nature, has not materially changed over the generations. but while time preference may appear to be relatively stable over history, perceptions of risk and uncertainty, which couple with time preference to create discount factors, obviously vary widely, as does liquidity preference, itself a function of uncertainty. the impact of increasing uncertainty and risk aversion was no more evident than in the crisis that gripped financial markets last autumn, following the russian default. that episode of investor fright has largely dissipated. but left unanswered is the question of why such episodes erupt in the first place. it has become evident time and again that when events are unexpected, more complex, and move more rapidly than is the norm, human beings become less able to cope. the failure to be able to comprehend external events almost invariably induces fear and, hence, disengagement from an activity, whether it be entering a dark room or taking positions in markets. and attempts to disengage from markets that are net long – the most general case – means bids are hit and prices fall. modern quantitative approaches to risk measurement and risk management take as their starting point historical experience with market price fluctuations, which is statistically summarized in probability distributions. we live in what is, for the most part, a stable economic system, where market imbalances that