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Making Clear Progress

Charles Plosser

The theme of this year's annual report is “Making Clear Progress,” which highlights the visible actions the Federal Reserve Bank of Philadelphia has taken to support the Third District and the Federal Reserve System as a whole. Yet, more meaningfully, our theme also conveys the bold steps the Federal Open Market Committee (FOMC) has taken to add clarity to communications about monetary policy.

In this year's essay, “Toward Clarity in Monetary Policy,” I discuss the benefits of transparency and clarity about monetary policy, which I believe enhances the central bank's commitment, credibility, and accountability. During 2011, I served with Vice Chair Janet Yellen, Governor Sarah Bloom Raskin, and Chicago Fed President Charles Evans on a communications subcommittee that developed two important changes in communications adopted by the FOMC in January 2012. I want to thank Loretta Mester, executive vice president and director of research, for her tremendous support to the subcommittee on this effort.

In the pages that follow, starting with First Vice President Blake Prichard's message, we provide an overview of the accomplishments and contributions of our Bank during 2011, which included a lot of hard work to implement the Dodd-Frank Wall Street Reform and Consumer Protection Act. For the Philadelphia Fed, this has meant adding responsibility for close to 70 savings and loan holding companies, not only Third District institutions but those from the adjoining Second District as well.

The Philadelphia Fed also led the efforts by the Federal Reserve to use data to identify and monitor financial risks. Our Bank has worked closely with the Kansas City Fed to create, staff, and manage a System program called Risk Assessment, Data Analysis, and Research (RADAR).

Board of Directors

Among the citizens who get to see our progress up close are the nine business leaders who serve on the Reserve Bank's board of directors. These directors by law fulfill not only a governance role in providing oversight for the Bank's performance but also a guidance role by providing valuable insight on economic and financial conditions in the District.

On behalf of our Bank, I sincerely thank all of them for their public service. In particular, I thank Charles P. Pizzi, former president and CEO of Tasty Baking Company, and Michael F. Camardo, retired executive vice president of Lockheed Martin, who both completed their terms in 2011.

At the start of 2012, Jeremy Nowak, president of the William Penn Foundation, and James E. Nevels, chairman and founder of The Swarthmore Group, began their terms as chairman and deputy chairman, respectively, of our board of directors. The Bank also welcomed two new directors: Michael J. Angelakis, vice chairman and chief financial officer of Comcast Corp., and Patrick T. Harker, president of the University of Delaware. Frederick C. “Ted” Peters II, chairman and CEO of Bryn Mawr Trust Company, was also re-elected to a second three-year term.

Our Advisory Councils

I also want to acknowledge the business and community leaders who participate on the Bank's Economic Advisory Council (EAC) and the Community Depository Institutions Advisory Council (CDIAC), two important groups pictured on the pages following our board of directors. The EAC includes representatives from diverse industries as well as nonprofits and organized labor in the Third District. The CDIAC brings together representatives from commercial banks, thrift institutions, and credit unions from around the Third District. One member from each Reserve Bank's CDIAC also serves on the Federal Reserve Board's CDIAC to share insights with peers from around the Federal Reserve System. I want to thank Richard J. Green, vice chairman and CEO of Firstrust Bank, for serving in this role in 2011.

I also thank Bharat Masrani, president and CEO of TD Bank, N.A., for his continued service in 2011 as the Third District's representative to the Federal Advisory Council, which meets quarterly with the Board of Governors in Washington, D.C.

Conversations with our directors, advisory councils, and others help bring Main Street perspectives to the national policy table at meetings of the FOMC. By law, votes are cast at the FOMC by the members of the Board of Governors, along with five of the 12 Reserve Bank presidents: the president of the New York Fed and four other presidents, who serve one-year terms on a rotating basis, as I did in 2011. Whether we vote or not, though, all Reserve Bank presidents attend the FOMC meetings, participate in the discussions, and contribute to the Committee's assessment of the economy and policy options.

Closing Thoughts

Finally, I offer my sincere thanks to the employees of the Philadelphia Fed, who, indeed, made clear progress during 2011. I especially want to acknowledge Michael E. Collins, who led the Supervision, Regulation and Credit (SRC) Department until his retirement on June 1, 2011, after 37 years with the Philadelphia Fed. We promoted William W. Lang, senior vice president and lending officer, to lead SRC.

I trust you will find this annual report informative, shedding light on our role as a part of the nation's decentralized central bank. Transparency and clarity about central banking are still evolving. I have described the process of improving our communications as more of a journey than an end. I invite you to continue that journey with us, by engaging in discussions with our staff on issues that matter to you and your economy.

Charles Plosser Signature
Charles I. Plosser
President and Chief Executive Officer
April 2012