From the Boardroom

	From left, Robert T. Parry, President; Judith M. Runstad, Chairman (1997);and John F. Moore, First Vice President.
From left, Cynthia A. Parker, Deputy Chairman (1998); and Gary G. Michael, Chairman (1998).

As we stand on the threshold of a new millennium, we in the Federal Reserve find ourselves looking forward to new, exciting ways of doing business. In addition to continuing to provide traditional financial and payments services to our customers here in the West, we are maximizing the potential of new technologies to improve and streamline our services.

We continually study trends shaping and transforming the banking industry and look for ways in which we can facilitate the transition taking place from a paper-based payments mechanism to an electronic one. We see fundamental structural changes in financial institutions, changes in the mix of products and services they offer, and new ways of delivering these services. During 1997 the Board of Governors of the Federal Reserve System convened a committee under the direction of Vice Chair Alice Rivlin to take a comprehensive look at how we fit into the changing payments mechanism and what our role should be. The Committee concluded that, while Reserve Banks should continue to provide their traditional services, they should also play an active, collaborative role in transforming the payments system.

This Annual Report looks at what trends we have observed during 1997 at financial institutions in our District, how our supervisory processes have responded to these changes, and what initiatives the Federal Reserve System has undertaken with regard to the payments system.

During the year we depend heavily on information and leadership from our directors with their special knowledge of areas and industries throughout our District. It is invaluable as we formulate monetary policy and manage the nationÌs financial system. We thank all Twelfth District directors for their wise counsel and service during 1997.

In particular, we want to express our sincere thanks and appreciation to those directors who completed their terms of service during 1997: on the Head Office Board, our Chairman of the Board, Judith M. Runstad (Partner, Foster, Pepper & Shefelman, Seattle, WA) and Gerry B. Cameron (Chairman of the Board, U.S. Bancorp, Portland, OR); on the Los Angeles Branch Board, Antonia Hernandez (President and General Counsel, Mexican American Legal Defense & Educational Fund, Los Angeles, CA) and David L. Moore (President, Western Growers Association, Irvine, CA); on the Portland Branch Board, John D. Eskildsen (President and CEO, Retired, U.S. National Bank of Oregon, Portland, OR); and on the Salt Lake City Branch Board, our Chairman, Gerald R. Sherratt (President, Retired, Southern Utah University, Cedar City UT).

Gary G. Michael, Chairman

Robert T. Parry, President