finally getting healthier and that the fed is getting closer to achieving its dual mandate objectives of maximum sustainable employment and price stability. that would be very good news even if it were to cause a bump or two in financial markets. regional economic conditions let me now turn to economic conditions a bit closer to home. while upstate new york outperformed the nation during the great recession, it has now returned to its more typical pattern of modest growth. this is not unexpected as many regions in the northeast have tended to grow more slowly in recent decades as the population has shifted to other parts of the country and as jobs in the once dominant manufacturing industry have diminished. that being said, some parts of the region are really struggling : syracuse, utica, binghamton and elmira have all yet to see a meaningful recovery in employment, which is troubling. the capital region, on the other hand, is a true bright spot. while upstate new york as a whole has gained back only a little more than half of the jobs lost during the great recession, albany is close to regaining all of the jobs that were lost. though the capital region ’ s public sector has exerted some downward pressure on job growth during the recovery, the education and health care sectors have been an ongoing source of stability and strength for the region. employment in the education sector has climbed nearly 25 percent since the end of the recession, an increase of around 5, 000 jobs, and the health care sector has added about 3, 000 jobs. and there ’ s some especially good news to report from the capital region ’ s manufacturing sector : jobs are growing, and growing quite strongly – a testament to the success of the area ’ s burgeoning high tech sector. since the recovery began, the area has added over 4, 000 manufacturing jobs, many of which are tied to computers and electronics. that ’ s an increase of nearly 25 percent. this pace of job growth is four times as great as the national pace. in fact, there are now more people employed in the capital region ’ s manufacturing sector than before the recession. not many places can say that, and this is certainly not true for the nation as a whole. in part, the success of local manufacturing reflects the presence of strong partnerships between industry and higher education. these cooperative arrangements, which help in the creation, development and commercialization of new products and processes, drive innovation and put local companies at the leading edge of technology. moreover, these partnerships directly support local

timothy f geithner : progress toward financial stability in emerging market economies remarks by mr timothy f geithner, president and chief executive officer of the federal reserve bank of new york, at the w p carey global leader lecture, paul h nitze school of advanced international studies, johns hopkins university, washington dc, 4 october 2006. i would like to thank matthew higgins of the emerging markets and international affairs group and margaret mcconnell of the research and statistics group at the new york fed for assistance and comments. * * * we are approaching the 10 - year anniversary of the financial crises of the late 1990s. these crises began in the emerging world and caused very substantial damage to the economies and financial systems of a large number of emerging market economies. they also provided the backdrop if not the catalyst to the crisis that hit the major financial centers in 1998. the world today looks considerably different than it did on the eve of those crises, but the episode still looms large in the minds of policymakers and financial market participants. the damage and fear of that time had a substantial impact on behavior, both in terms of the policies of governments and how market participants think about and manage risk. and those changes in behavior have been important contributors to the period of stable real growth and financial sector resilience that has characterized much of the world since. despite this progress, the causes and implications of the crises remain the subject of contentious debate. in fact, if you'd fallen asleep in early or late 1998, and awakened in the imf boardroom yesterday, you would find officials discussing many of the same questions. were the crises the result of fundamental economic and financial weakness at the national level, or the result of forces largely beyond the control of governments in emerging market economies? can small open economies grow and prosper with open capital markets and floating exchange rates? did moral hazard induced by the success of the mexican package earlier in the decade cause the buildup in lending that led to crises that followed? did the initial response of the imf and its creditors make the crises worse? what level of insurance, in the form of reserves or debt structure, is adequate to protect against crises? how should the imf differentiate between conditions of illiquidity and insolvency, and decide when it should help a member country restructure its debt obligations? even among people who probably agree on the most important issues in economics and finance, you can still find stark differences in their answers to these questions. the diversity