In my personal view, the reconsideration of business plans needs to incorporate the longterm macroeconomic and technology trends even as they incorporate the lessons learned from the financial crisis. Those business plans need to look ahead five years or more to position the financial firms and, with them, the financial system for the opportunities and risks that lie ahead. We will need to meet the long-term challenges of changes in the global macroeconomy, the distribution of growth opportunities and the distribution of wealth, and the speed and power of technological change. 4  BIS central bankers’ speeches  Since so much opportunity has developed elsewhere in the world, how will the public sector reform agenda impact the global banking activities of financial institutions? We do not know yet how the reform agenda will affect the international activities of G-SIFIs, although we can see some early indications. Higher capital requirements and more stringent prudential standards are causing some firms to re-examine their correspondent and business relationships and make new cost-benefit assessments. The greater focus on stress testing and resolution planning may lead to more discussion of firm structure, including the number of subsidiaries, the alignment of the corporate structure with the firm’s business activities, the management of intragroup exposures, the use of parent guarantees, and the correlation of the firm’s capital and liquidity structure with the firm’s business and legal entity structure. In my personal view, discussion will no doubt lead to action, in the best scenario, by the large, systemically important financial firms themselves.

Today the proportion is 40/60, and the emerging market countries continue to grow substantially faster than the large advanced economies. Yes, China is an important component of that growth, but the trend reflects strong performance in recent years in many regions of the world outside the advanced economies. A further long-run force, seen as the most disruptive, is technology. At one time, the financial system, perhaps until the 1970s or 1980s, played an important role in searching for savers/investors to contribute to financing those major investments. Much of the work of identifying and linking the sources and the uses of funds has been facilitated or even taken over by technology – just think of the ubiquity of trading platforms, screens, and financial news and, beyond that, the increasing automation and artificial intelligence applied to credit evaluation, financial analysis, and trading activities. I mention these three long-run forces because the financial industry has been and still is adapting to these trends. Indeed, the major transformation in the U.S. financial industry that  BIS central bankers’ speeches  1  occurred in the course of the 1980s and 1990s – the development of over-the-counter derivatives markets, the shift toward a larger role for securities markets relative to banking markets – was just such an adaptation to the long-run forces of change. The shift reflected the growth of institutional wealth and the power of technology, ubiquitous information and expanded financial know-how.