comptroller brosnan will be discussing in detail the guidance issued by the federal reserve and the occ. i should also note that the new york state banking department recently released a report on banks ’ hedge fund activities that supports the observations and supervisory priorities set forth in the basle committee report. in addition, international supervisory bodies and supervisors from countries outside the u. s. are in the process of acting on many of the proposals discussed here today. actions regarding hedge funds by international groups and individual countries in february, iosco, the international organization of securities commissions, established a task force on hlis. i understand that iosco is focusing on securities firms ’ dealing with hedge funds and the ways in which risk management and market transparency can be improved, which complements the basle committee ’ s work concerning banks. because banks and securities firms are the primary counterparties of hlis, it is crucial that there be a coordinated supervisory response at the international level among securities and bank regulators. at their meeting last month, the group of seven ( g - 7 ) countries issued a statement endorsing both the basle committee and iosco efforts. the g - 7 intends to continue to review the topic of hlis, which will be of assistance as we urge countries to implement sound practices in this area. i would not want to characterize or opine upon the efforts of any one jurisdiction ; many countries ’ efforts, like ours, are underway only recently and need time to develop and take hold. there probably will be differences in the degree to which supervisors in different countries address the questions i have discussed today – if only because the intensity of hli activities varies among countries. but on the whole, i believe that supervisors in major countries will follow up on the recommendations issued by the basle committee. direct versus indirect methods of addressing hli safety and soundness many governments have considered or will consider the advantages and disadvantages of imposing direct regulation on the hli industry. the basle committee report discussed that issue and concluded that concentrating on the behavior of banks and other counterparties doing business with hlis would yield effective and more immediate results. a common element of many hlis is that they are structured in ways that minimize their exposure to supervisory oversight and costs. thus, many have chosen to organize themselves legally in jurisdictions that offer modest supervision and low taxes. am i pleased that so many hlis are organized legally in what many would characterize as tax havens? no. but i do not think

just a single regional economy, but rather many different local economies. let me talk a bit about how the different parts of our region have been doing. regional economic conditions since our last briefing in november, the economic recovery has been variable across the region – strong in some places but weaker in others. let me begin with the area that has struggled the most. puerto rico ’ s economy has, unfortunately, been in a deep economic slump that has lasted for nearly a decade. over the past few years, public sector job losses have continued to weigh against modest job gains in the island ’ s private sector. and ongoing difficulties in the island ’ s labor market continue, with labor force participation still alarmingly low, and unemployment stubbornly high at a rate well above the mainland ’ s. the good news is that we are finally beginning to see some firming in economic conditions on the island. at the other end of the spectrum, new york city has been experiencing a robust recovery. while the great recession was clearly the worst post - war downturn in u. s. history, new york city was not as badly affected as the rest of the country. as of april, almost five years since the end of the recession, the nation has recovered nearly all of the jobs that were lost. bis central bankers ’ speeches by contrast, new york city reached this milestone more than two years ago. and, as we ’ ve highlighted in previous press briefings, this rebound has occurred despite the lack of any significant recovery in employment on wall street. the recovery has generally progressed at a more moderate pace in the other parts of our region. consistent with historical patterns, upstate new york as a whole has been growing modestly, with buffalo and rochester doing a little bit better than their upstate peers. binghamton, on the other hand, has really been struggling with no signs yet of any meaningful recovery. meanwhile, northern new jersey ’ s economy had been growing fairly steadily until this past winter when activity softened, probably due at least in part to the unusually harsh weather. now that spring is finally upon us, we hope to see economic conditions improve more significantly. what kinds of jobs have been created during the recovery? let me turn to the topic of today ’ s press briefing : how the types of jobs in the region have changed over the last business cycle. firms often change the way they utilize workers and the mix of skills they employ during recessions and recoveries. the weakening demand during recessions forces firms to look