Frameworks are being established to identify and address the risks posed by global systemically important financial institutions. Make derivatives markets safer. Requirements are being put in place to foster central clearing, margin requirements, and mandatory reporting of OTC derivative trades. Transform shadow banking into resilient market-based finance. Oversight of shadow banking entities is being strengthened. The Financial Stability Board has been working to ensure that these internationally agreed regulatory reforms are implemented in a timely and consistent manner across the major jurisdictions. While gaps remain in some areas, implementation is generally proceeding well. It is time now to begin the important task of evaluating the impact of the reforms. In fact, the FSB is developing a conceptual framework for doing this. The framework aims to answer two questions: have the regulatory reforms been effective – are they achieving their intended outcomes? 1/7  BIS central bankers' speeches  what are the cumulative effects of the reforms – how have the various reforms interacted with one another, are they coherent, what are their larger social benefits and costs? This work is especially important in the current context: As memories of the crisis fade and the burden of regulatory reforms comes into sharper focus, the pressure to unwind the reforms will grow. It is important for the credibility of the reforms that their impact be objectively evaluated. It is also incumbent on us as regulators to be accountable for the substantial changes that we have put in place over the last eight years.

Fostering a culture of trust in the financial industry A second growing focus in the supervisory agenda is to help foster a culture that motivates the right ethical behaviour and responsible risk-taking in our financial institutions and markets. But it will require different and novel approaches because there are limits to what externally imposed rules can do to promote the right values in financial firms. The financial industry continues to be plagued by egregious misconduct, nine years on from the global financial crisis. In the US and UK, major retail banks are still settling charges against them for mis-selling investment and insurance products in the run-up to the financial crisis. Across financial centres, traders at several banks were found to be involved in flagrant manipulation of key financial benchmarks. Internationally, regulators have been cracking down on illicit fund flows, with several financial institutions being penalised for lapses in money laundering controls. In Singapore, we have taken decisive actions against financial institutions that fell short of our anti-money laundering standards. MAS shut down two banks and fined several others, and culpable individuals have been charged in court and sentenced. Reform of the financial industry will not be complete until this issue of trust and ethics is addressed. We need to “get the culture right”. This will require collective effort by regulators, the industry, and financial institutions. The FSB and IOSCO have been driving international efforts to reduce misconduct risk, focusing on governance and incentive structures, conduct standards in wholesale markets, and the reform of financial benchmarks.