but we really are caught in a process dilemma. bankers cannot complete their models and collect the necessary data until they know what the specific requirements will be. regulators, on the other hand, will have to develop these requirements before seeing the actual results of these models and robust databases. the process we have for vetting basel ii in the united states is probably similar to those followed in many other countries. we are putting forward proposals and seeking comment from the industry, our legislature, and other interested parties. given what a vast undertaking basel ii is, this seems entirely appropriate and beneficial. in addition to what we learn from the work on qis4 results, we will also assess the trading and banking book comments of the basel committee on banking supervision and the international organization of securities commissions. we will incorporate the latest proposal into the notice of proposed rulemaking and hope to complete our efforts in a timely manner. challenges for supervisors in preparing for basel ii, supervisors realize that they must address their own capital needs - that is, human capital. throughout basel ii implementation in the united states, it has become strikingly apparent that supervisors will need a higher degree of knowledge, skill, and experience. even just our preliminary work on basel ii, which includes writing regulations, drafting guidance, and evaluating preliminary estimates from banks, has consumed substantial resources within the federal reserve system. we are in the process of training existing staff members and recruiting new ones, and that itself takes time and resources. we are aware that to implement a framework of the complexity and scope of the advanced approaches of basel ii, we need highly qualified supervisors. as we have learned over the past few years, many aspects of basel ii will require a considerable amount of judgment and experience. that is, as supervisors engage in the qualification of institutions for basel ii and then conduct ongoing monitoring, they will need to become intimately familiar with many technical aspects of the framework and have the ability to assess each institution in context. we want to ensure that in all basel ii discussions, bankers will sit across the table from supervisory staff who understand the framework and how it applies to individual institutions. this does not pertain just to basel ii, specifically, but also to supervision of evolving risk - measurement and - management practices more generally. as they have in the past, supervisors must keep pace with the latest developments in the industry and be able to differentiate among them in terms of appropriateness. one of the many attractive characteristics of the basel ii framework is its flexibility for incorporating new best practices without

for release on delivery 5 : 15 a. m. est ( 11 : 15 a. m. local time ) december 18, 2019 update on digital currencies, stablecoins, and the challenges ahead remarks by lael brainard member board of governors of the federal reserve system on the monetary policy, technology, and globalisation panel at “ monetary policy : the challenges ahead, ” an ecb colloquium held in honour of benoit coeure sponsored by the european central bank frankfurt, germany december 18, 2019 i am honored to be here today to celebrate benoit coeure ’ s tenure at the european central bank ( ecb ). i have been working with benoit now for a decade — starting at our respective treasuries where we both were drafted as financial firefighters, migrating to our respective central banks to help with stabilization, recovery, and normalization, and most recently preparing for the challenges that lie ahead. over the course of that decade, i have developed deep admiration for benoit ’ s keen insights and outstanding judgment. 1 equally important, benoit always has a plan. generally, it is the right plan addressed to the right problem, and he executes it with exceptional efficacy and strong support. that is a rare and invaluable combination in public service. indeed, benoit ’ s tenure at the ecb coincided with an incredible turnaround in unemployment and output growth. both the euro area and the global economy have benefited greatly from benoit coeure ’ s outstanding public service. moreover, benoit ’ s research interests are forward - looking and extend well beyond the macro economy. when benoit was appointed chair of the committee on payments and market infrastructures ( cpmi ), the global standard setter for payment issues, he doubled its output, resulting in 75 reports. 2 he turned its focus to distributed ledger, stablecoins, and central bank digital currencies long before many other central bankers realized these issues would be transforming their worlds. indeed, the number of google searches for “ central bank digital currencies ” increased sharply over the course of benoit ’ s tenure as chair of the cpmi. i am grateful to paul wong, david mills, theresa dinh, and lacy douglas of the federal reserve board for assistance in preparing this text. these remarks represent my own views, which do not necessarily represent those of the federal reserve board or the federal open market committee. see https : / / www. bis. org / cpmi. - 2digital currencies