still have much to do. we must sustain the current drive to minimize or eliminate the vulnerabilities i have discussed. we must view september 11 as a wake - up call to improve the resilience of financial markets and institutions. we cannot afford to ignore the lessons learned. i ask for your cooperation in what we view as a partnership. we were there for those who needed us on september 11 and in the days that followed, and we will be there again, if necessary. but we also look to financial institutions to conduct an honest appraisal of their vulnerabilities - - or to listen to our appraisal of them in our routine supervision over the institutions'u. s. operations - - and to take the necessary actions to remedy any significant operational weaknesses and deficiencies. i wish us all the best in this endeavor.

to face in the coming years. we have much less experience modeling and predicting these operational risks than we do credit or market risks, and indeed some threats may be too idiosyncratic to be modeled at all. as a result, a prudential supervisory model appears preferable at this time. through the routine supervisory process, we are talking to institutions about the robustness of their disaster - recovery planning but are stopping short of setting detailed regulatory standards at this point. although i anticipate that we will issue updated supervisory guidance and examination procedures for business continuity before long, i am not certain that we want to approach this issue with a checklist. in this process, we are working closely with other regulators, including the other federal banking regulators and the securities and exchange commission. cities and regions outside new york city are not without risk and also need to consider reasonable threats, both man - made and natural. i am therefore pleased that many institutions in those cities and towns, like their colleagues based in new york city are seriously considering updating and implementing business - continuity plans. institutions also need to define their targets for recovery from a disaster in a consistent manner. although in practice, expectations for recovery time may differ depending on the scenario, some critical functions, including those safeguarding and transferring funds and financial assets, are so vital to the domestic and global financial system that they arguably should continue with minimal, if any, disruption, even in the event of a major regional disaster. clearly, all institutions need to plan to continue serving their customers in a major disruption, and supervisory standards have required them to do so for many years. in addition, it is increasingly clear that the operational resilience of the largest institutions in key markets needs to reflect their systemic impact across the financial sector. expectations should be highest for institutions whose activity can significantly affect other institutions, such as major clearing and settlement entities, and institutions that act as financial " utilities " in some of their functions. however, we need to balance competing issues. we have an ongoing interest in the safety and soundness of individual institutions, as well as in systemic financial stability. but we also recognize that, even though the largest nationally and internationally active u. s. and foreign banking institutions have a key role to play in financial stability, they also participate in a competitive marketplace. thus, we need to be careful not to create undue burden on a handful of institutions. conclusion six months after september 11, much has been planned and achieved, but we