scarce savings among competing demands. ours is to set overall conditions, particularly by maintaining price stability, that allow market prices to accurately reflect supply and demand dynamics. a price system that is accurate in that way supports the market allocation of all resources, including capital, to their most productive uses. at times, markets and federal reserve policy are complementary in an additional way. as we saw last september 11, when conditions in markets become so stressed that they no longer function efficiently for pricing and allocating risk, the federal reserve may be called upon to provide temporary infusions of liquidity. however, it is also important to understand the limits of what the federal reserve, or monetary policy more generally, can do. first, monetary policy action cannot appropriately be targeted to benefit one industry, region, or economic group. we key our policy on the average macroeconomic condition that prevails, knowing that conditions may vary greatly among industries, regions, and groups. of course, that means that those individuals and businesses whose conditions are significantly different from the average might feel aggrieved. a closely related logic applies to relative prices. with one major exception, the federal reserve does not attempt to adjust the relative price of any class of goods, services, or assets. that major exception is the overnight funds rate. in that market, in which we have a monopoly on supply, we set the price and let the market determine the quantity demanded. we do this because we find that adjusting the price of overnight credit is currently the most efficient way to achieve our mandate of low and stable inflation and maximum sustainable growth. but that is where our monopoly ends. short - term interest rates are such a powerful tool for central banks because so many other financial assets are priced based, in part, on the price of short - term credit and market expectations about the future adjustment of that price. in all other markets, the forces of supply and demand determine prices. some have suggested that under some circumstances central banks should adjust the overnight funds rate to affect intentionally the relative price of another asset class, namely equities. but if a central bank elevates another set of relative prices to being targets of policy, i believe that it should have strong conviction in two areas. first, that its tool, the provision of reserves to the banking system, will predictably influence that relative price, and with minimal unintended consequences. second, that adjusting that relative price will, in turn, have a predictable and significant role in achieving our

bank personnel, and • the designation of an individual responsible for coordinating and monitoring day - to - day compliance with the bsa. the federal reserve works to ensure that the banking organizations we supervise understand the importance of having in place an effective anti - money laundering program. when a reserve bank conducts a bsa / anti - money laundering examination of a banking organization under its supervision, the four components of the program establish the framework for the examination. to properly evaluate the effectiveness of a banking organization ’ s anti - money laundering program, the federal reserve has developed comprehensive examination procedures and manuals, and regularly provides training for its examiners. the bsa / aml examination procedures are currently under revision to reflect newly issued regulations under the usa patriot act. the federal reserve ’ s bsa examinations are risk - focused. while a “ core ” bsa examination is required of all banking organizations, risk - focused procedures allow examiners to apply the appropriate level of scrutiny to higher - risk business lines, where necessary, and alleviate burden where high - risk products or customers are not present. in other words, a small state member bank with a low - risk customer base receives a considerably different and less burdensome bsa / aml examination than a large, complex banking organization with international operations. the examination process during every safety and soundness examination of banking organizations under federal reserve supervision, bank examiners specially trained in bsa requirements review the institution ’ s previous and current compliance with the bsa. examiners first determine whether the institution has included bsa / aml procedures in all of its operational areas, including retail operations, credit, private banking, and trust, and has adequate internal control procedures to detect, deter and report money laundering activities, as well as other potential financial crimes. as part of such an examination, bank examiners also review an institution ’ s fraud detection and prevention capabilities, and its policies and procedures for cooperating with law enforcement ( whether through responding to subpoenas, acting on information requests under section 314 of the usa patriot act, or otherwise ). our supervision policy guidance in this area requires that examiners also conduct a review of the databases of suspicious activity reports ( sars ) and currency transaction reports ( ctrs ) to determine if the banking organization that is about to be examined has filed such reports and that they appear complete and timely. examiners are not doing this to count the number of sars and ctrs, to compare their findings against other institutions, or to base