Total lossabsorbing capacity, or TLAC, of the old parent company would be available to absorb losses and could be used to recapitalize the new parent company. But, the task of operationalizing resolution for large, global banks—including achieving full clarity on the roles of the home and host supervisors—is still not complete. It is key that work continues on this front to ensure that a systemically important firm can fail without threatening to topple the rest of the financial system— an important step toward ending “too big to fail.” Third, some of the obvious systemic vulnerabilities exposed by the financial crisis have been remedied. Important changes include mandatory clearing of standardized over-the-counter derivatives through central counterparties, or CCPs; more intensive supervision of systemically important CCPs; and reforms of the tri-party repo system and the money market mutual fund industry. But, even as we reduce or eliminate old vulnerabilities, we must not rest on our laurels, for new vulnerabilities will inevitably take their place. These accomplishments notwithstanding, I have no doubt that the current regulatory framework could be improved. Indeed, the official sector should assess the efficiency and effectiveness of regulations on an ongoing basis. I agree with Vice Chairman Quarles’ observation that there is more we can do to make the regulatory regime more efficient, transparent, and simple— including relief for small banks, greater tailoring based on a firm’s level of systemic importance, and simplifying the Volcker Rule. 5 Some of these changes have already been adopted or are in process.

4 See Board of Governors of the Federal Reserve System, The Federal Reserve System: Purposes and  Functions (2018). 5 See remarks by Randal K. Quarles, Early Observations on Improving the Effectiveness of Post-Crisis  Regulation, January 19, 2018. See also remarks by William C. Dudley, Lessons from the Financial Crisis, November 6, 2017. 6 7/8  BIS central bankers' speeches  6 For further discussion, see Ashcraft and Schuermann, Understanding the Securitization of Subprime Mortgage  Credit, Staff Report No. 318, March 2008. 7 See remarks by Lorie Logan, The Role of the New York Fed as Administrator and Producer of Reference Rates ,  January 9, 2018. See also the Alternative Reference Rates Committee. 8 See Financial Stability Board, Final Report on Foreign Exchange Benchmarks, and FX Global Code. 9 For further discussion of supervisory activities, see Eisenbach, Haughwout, Hirtle, Kovner, Lucca, and  Plosser, Supervising Large, Complex Financial Institutions: What Do Supervisors Do? February 2017. For a discussion of the complementarity of supervision and regulation, see Eisenbach, Lucca, and Townsend, The Economics of Bank Supervision, Staff Report No 769, January 2017. 10 For a discussion in the context of misconduct risk, see remarks by Kevin J. Stiroh, Misconduct Risk, Culture and  Supervision, December 7, 2017. See also Chaly, Hennessy, Menand, Stiroh, and Tracy, Misconduct Risk, Culture and Supervision, December 2017. 11 William C. Dudley, Opening Remarks at Reforming Culture and Behavior in the Financial Services Industry:  Expanding the Dialogue, October 20, 2016.