Thank you, Greg, for that kind introduction. I’d like to make just a few opening comments and then I look forward to engaging in a more informal dialogue with you, Greg.

I noticed in looking at the agenda that I am speaking to you after a working breakfast on risk and before a session on the scope of the recovery in the U.S. economy. Accordingly, I thought I’d say a word about both.

The Recovery.

First, we do believe that economy is strong and growing stronger.

Annualized GDP growth in the past two quarters has been stronger than most predicted --– 1.7% in the fourth quarter of 2001 and 5.8% in the first quarter of 2002.

Inventory adjustment appears to be almost over. Production is rising. Equipment spending is stabilizing. Although investment in equipment and software declined at a 0.5% annual rate in the first quarter, a sharp decline in investment in transportation goods, particularly aircraft, offset solid gains in other types of capital investment. Computer expenditures, for example, rose at a 38% annual rate in the first quarter of 2002 – on top of a 34% increase in the fourth quarter of 2001.

Consumer spending is healthy. It rose by 3.5% in the first quarter. Non-automotive spending increased by more than 6%.

Inflation remains tame.

And the productivity numbers increasingly support the hypothesis that new technologies have increased the growth potential of the U.S. economy. Productivity increased at a 5.5% annual rate in the fourth quarter of 2001 and at an eye-popping 8.6% rate in the first quarter of 2002.

All told, we continue to expect growth over the four quarters of this year to come in at a healthy 3 plus percent.

Terrorism, however, remains an economic wild card. And, unfortunately, we are almost certain to be attacked again. As the Vice President said last weekend, "we’re as much involved in conflict today as we were September 12 . . . the prospects of a future attack against the United States are almost certain."

Our job is to try to prevent those attacks from occurring and to take steps now that will mitigate the damage of future attacks.

At Treasury, we lead the nation’s fight on the financial front of the war on terrorism. Among many, many other things, we have implemented provisions of the USA PATRIOT Act that require broker-dealers, money-service businesses, and other financial institutions to adopt anti-money laundering compliance programs. On the international front, we are working bilaterally and multilaterally through organizations like the G7 and the Financial Action Task Force to close the financial system to terrorists.

Treasury is also leading steps to mitigate the damage of future attacks. For example, we play a leadership role in critical infrastructure protection. An October 16 executive order from the President established the Critical Infrastructure Protection (CIP) Board, which seeks to secure information systems, including emergency preparedness communications, and the physical assets that support such systems. I represent the Department on the CIP Board, and Assistant Secretary Bair chairs a committee of state and federal financial regulators that addresses CIP issues with regard to the financial sector of the economy.

And we are working hard to obtain passage of a terrorism insurance bill that makes good economic sense. Consensus estimates put the losses resulting from the September 11 attacks in the $36 billion to $54 billion range. To put that in perspective, the losses from Hurricane Andrew were $19.3 billion (adjusted for inflation). In addition, terrorist risks are harder to model than hurricanes.

Immediately following September 11, the reinsurance industry almost entirely stopped assuming terrorism risk and primary insurers withdrew from the market where state law and regulation permitted them to do so. More recently, there has been some tentative reengagement in providing limited coverage at high premium rates, but there are still serious gaps, and the expiration of additional policies over the summer will expose more businesses to risk.

Needless to say, this unprecedented gap in coverage has serious adverse consequences for our economy. Most specifically, it makes it more difficult to finance commercial construction and more difficult to sell commercial real estate. More generally, the lack of terror risk insurance jeopardizes the economy’s ability to withstand future attacks.

Accordingly, we are working with Congress to obtain legislation that would provide a federal backup for terrorism insurance. The House has passed a bill that is a starting point. It is time for the Senate to act.

There are many, many other things that we are doing on these fronts, Greg, but I’d like to stop there open it up to you for some questions.