They depend on the hundreds of examiners who are dedicated professionals working in the public interest. Our examiners fulfill their obligations with considerable care, mindful of the stakes to Main Street when something goes wrong on Wall Street. I am grateful for their efforts. IV. Reasonable expectations  Before concluding, let me offer a broader view of what we at the Federal Reserve expect from prudential supervision. Very briefly, I submit that supervision should be fair, conscientious, and effective. Fair supervision means that the rules are applied consistently across the firms we supervise. We all need to know the rules and follow the same rule book. It also entails a commitment to independence from business or political influence, as envisioned by the Federal Reserve Act one hundred years ago. Conscientious supervision means we must be committed to sustained and, if necessary, radical self-improvement. The Beim report is an example of our willingness to commission and accept self-critical analysis and our commitment to improve. But we cannot stop there. To this end, we will be working with the Board of Governors on its upcoming review of whether the LISCC Operating Committee receives information that is sufficient to reach sound supervisory decisions. One subset of this system-wide inquiry will analyze regulatory capture – specifically, how divergent views are presented to decision makers at the Board. The review is expected to take several months. Effective supervision means tough supervision and demands a focus on large banks that pose systemic risk.

Prior to the crisis, liquidity practices did not generally anticipate the possibility of severe drops in the prices of saleable assets. 3  See, e.g., 12 U.S.C. § 5365(a)(1). 4  See 12 U.S.C. § 5365(i). 5  Board of Governors of the Federal Reserve System, Press Release, October 23, 2014. 6  Daniel Tarullo, “Stress Testing after Five Years,” Remarks at the Federal Reserve Third Annual Stress Test Modeling Symposium, Boston, Massachusetts, June 25, 2014. 7  See Board of Governors of the Federal Reserve System, Comprehensive Capital Analysis and Review 2014: Assessment Framework and Results, March 2014, at 7–8. 8  See 12 C.F.R. §§ 225.8(c)(2) and (e)(2)(iv). 9  See Citigroup, Inc., “Citi Statement on 2014 CCAR Results,” March 26, 2014. 2  BIS central bankers’ speeches  Following the crisis, the Federal Reserve imposed new liquidity regulations, including the Basel III Liquidity Coverage Ratio. The objective of these new regulations is to require large firms to hold levels of liquid assets sufficient to protect against constraints on their funding during times of financial turmoil. We have also implemented liquidity stress test assessments for systemically important financial institutions. These assessments provide important insight into the adequacy of liquidity positions and bank preparedness for upcoming regulatory standards. Beyond capital and liquidity, the Federal Reserve has increased its focus on risk management practices at the largest and most systemically important financial institutions. We learned from the crisis that risk management in the financial services industry had not always kept pace with changing market practices.