hazard and the subsidy implicit in the federal safety net. i have spent a good deal of time of late on the fourth objective. therefore, today i will concentrate on the first three and how, in particular, financial reform must be careful to preserve the role of the state - chartered bank in meeting our economy ’ s macroeconomic objectives and our concerns regarding systemic risk. the importance of the state - chartered bank some erroneously dismiss state - chartered banks as representing only the down - scale end of the banking market and, therefore, being not particularly worthy of careful policy consideration. state - chartered banks indeed are smaller on average than national banks, and are disproportionately represented within the very smallest size class. nevertheless, state - chartered banks account for about a third of our superregionals, not to mention a few state banks that are among the very largest money center institutions. even the preponderance of small, state - chartered banks, however, play a critical role within our financial system, for several reasons. first, having large numbers of community - sized banks, be they state - chartered or national banks, is a major contribution to the stability of the banking system and the well - being of the macroeconomy. just as a more highly diversified loan portfolio reduces risk to the individual bank, a more highly diversified banking structure reduces risk to the banking system as a whole. indeed, our decentralized and diverse banking structure was arguably the key to weathering the financial crisis of the late 1980s. during those dark days, our system was able to absorb more than a thousand u. s. bank failures. and yet here we are, less than a decade later, with loan loss reserves and bank capital at their highest levels in almost a half century, and the insurance fund restored to its maximum coverage ratio - - all without cost to the taxpayer. of course, the bank failures of the past decade, combined with the current wave of mergers and acquisitions, have served to reduce significantly the total number of banking organizations in the u. s. but the more than 7, 000 separate banking companies that remain are more than sufficient to maintain our highly decentralized and flexible banking structure. large numbers of small banks go hand in hand with a macroeconomy characterized by large numbers of small, entrepreneurial nonfinancial businesses. smaller banks traditionally have been a major source of capital for small businesses that may not have access to securities markets. in turn, small businesses account for the

focus on the concerns of low - and moderate - income populations. ” www. federalreserve. gov / aboutthefed / cac. htm. lael brainard, “ community investment in denver ” ( speech at the federal reserve bank of kansas city, denver branch, denver, colorado, october 15, 2018 ), www. federalreserve. gov / newsevents / speech / brainard20181015a. htm. under chair powell ’ s leadership, eric belsky, anna boyd, federal reserve bank of cleveland president loretta mester - - who chairs the committee on research, public information, and community affairs for reserve bank presidents - - and community development staff across the system are continuing to advance this agenda. over the past year, all 12 reserve banks have adopted a common community development strategic plan that seeks to advance the economic resilience and mobility of low - and moderate - income households and communities and to enhance public awareness of these issues. during chair yellen ’ s 16 years as a public servant in the federal reserve, her words, actions, and research demonstrated a deep commitment to striving for an inclusive economy and recognizing the challenges faced by underserved communities. 12 from her speeches to her policy deliberations, janet made clear that her duty was to serve main street and all americans. the award for excellence in community development that we are establishing tonight memorializes janet yellen ’ s commitment to the people and places that make up our vibrant economy, including those who face challenges. going forward, we will look to celebrate staff within the system like ariel cisneros - - the first to receive this award in janet yellen ’ s name - thus honoring those who innovate, trailblaze, and embody the same deep - seated commitment to low - and moderate - income communities that janet yellen espouses. with that, it is my great pleasure to introduce chair janet yellen. janet l. yellen served as a member of the board of governors from august 12, 1994, to february 17, 1997 ; president and ceo of the federal reserve bank of san francisco from 2004 to 2010 ; vice chair of the board of governors from october 4, 2010, to february 3, 2014 ; and chair and executive officer of the board of governors from february 3, 2014, through february 3, 2018 ( www. federalreservehistory. org / people / janet _ l _ yellen ).