just a few words on the - insti. monetary policy is conducted by a committee called the federal market committee. the fomc has it's called meets in washington eight times a year during the crisis its also held video conferences. when we have a meeting ofhe fomc there are 19 people sitting around the table. there are seven governors, seven members of the board of governors who have been appoi appointed by the president and confirmed by the senate. and then 12 presidents of the 12 reserve banks each of whom has been found or appointed by the board he dirtors at each reserve banks and confirmed by the board of governors in washington. there are 19 people around the table. we all participate in the monetary policy discussion. when it comes time system's a little bit more complicated in any given meeting there are actually only 12o vot. the voters in any given meet rudy giuliani the seven members of the board of governors. currently five, we have two empty seat, we hope to get those filled soon. the seven governors have a

so we are helping lead a governmentwide effort to build a new network of relationships and insti tuitions that spans the pacific to complement is the success of our durable atlantic partnership. we are strengthening our alliances in asia, launching new strategic dialogues and coming initiatives, creating and joining important, multilateral institutions to underscore that america is and will remain a pacific power. in the coming century, no region will be more con see wental to america's future. this is not just a concern for eap, it's also for you know, wha and sca, but it's really for all of us because the security and economic interestsing will affect everything we do everywhere. so we have to engage you in our efforts. and we've reached out to, for example, eur to help us with an asia dialogue with the eu. we're working hard with our friends in latin america to expand their reach to asia, but to do so in a way that helps themselves and not just creates a market for natural resources. we should engage everyone as partners to working to establish a rules-based order for coming years. and

yes. [ inaudible ] >> why do you think these insti [ inaudible ] so much risk -- [ inaudible ] couple of reasons. one reason was simply the fact that firms were probably too confident about house price increase. house prices were likely to keep rising. and in a prices are rising these are not bad products because people can afford to pay for a year but then they can refinance into something more stable than might be a way to get people into housing. but, of course, the arriving was that house rises wouldn't keep rising and that's ultimately what happened. the other aspect of this was that the demand for securitized products grew very substantially during this period. in part there was a large international demand from europe and from asia for high quality assets. and the ever clever u.s. financial firms figured out that they could take a variety of different kinds of underlying credits whether subprime mortgages or whatever and through the miracles of financial engineering they could create from that at least some securities that would be high quality, it would be rated aaa in which t

it's been a real insti