sort would really be efforts to improve the risk - assessment and riskmanagement capacities of management and boards, rather than to focus specifically on the divergence between shareholder and regulatory interests with respect to risk appetite. an effective system of controls is important both to shareholders and to regulators. thus, for instance, the considerable and continuing emphasis we have placed on firms developing and maintaining effective management information systems makes risk assessment work better for shareholders, even as it facilitates supervisory oversight. with respect to the institutional features of board oversight of risk management, there is also substantial overlap in the interests of shareholders and regulators. for example, both shareholders and supervisors should expect a board to include members with the expertise, experience, and time commitment that are appropriate to risk management of the kinds of activities in which the financial firm engages. of particular interest are three board positions – the nonexecutive chair or lead director, the head of the risk committee, and the head of the audit committee. more generally, shareholders and supervisors must have confidence that globally active institutions with hundreds of thousands of employees have audit and risk committees with the practical ability to provide effective oversight of risk decisions. 14 i might note in passing that regular discussion between board members and supervisors can also serve the interests of shareholders, since supervisors may have an informed perspective on the firm ’ s operations that enables boards better to fulfill their strategic and risk - oversight functions. supervisors should also expect a well - conceived process for board review of major firm decisions, which will nearly always carry some implications for risk management and risk appetite. in practical terms, such a process would connect decisions on strategy, riskappetite setting, and capital planning. neither we nor shareholders should be comfortable with a process in which strategic decisions are made in one silo, risk - appetite setting in another, and capital planning in yet a third, with the convergence of these efforts coming together only when it is too late for each to affect the other, or for the board to be able to exercise effective oversight. these major decisions need to be made in an integrated manner. indeed, insured depository institutions are prohibited by statute from making any capital distribution that would render the firm undercapitalized. 12 u. s. c. § 1831o ( d ) ( 1 ). beverly hirtle ( 2014 ), “ bank holding company dividends and repurchases during the financial crisis, ” federal reserve bank of new york staff report no. 666 ( new york : federal reserve bank of

niklaus blattner : system stability and security of the systems summary of a speech by prof dr niklaus blattner, vice - chairman the governing board of the swiss national bank, at the luzerner tage fur informationssicherung ( lutis, conference on information security ), lucerne, 25 may 2004. the references for the speech can be found on the swiss national bank ’ s website. * * * the stability of the banking system and the security of the financial market infrastructure - including the stock exchanges and especially payment and securities settlement systems - have become an important concern of central banks all over the world in recent years. this has notably happened against the background of the numerous financial crises witnessed during the past decades. moreover, events such as 9 / 11 have heightened awareness for the security of the financial markets and other infrastructures. in switzerland, the growing importance of system stability has also been reflected in the new national bank act, which entered into force on 1 may 2004. within the framework of its principal mandate of pursuing a monetary policy in the interests of the country as a whole while at the same time ensuring price stability, the swiss national bank ( snb ) is legally obliged to make a contribution to system stability and to facilitate and secure the operation of cashless payment systems. in implementing its mandate, the snb takes preventive measures as well as measures aimed at overcoming crises. for instance, in a crisis the national bank plays an important role in providing liquidity. with the new act, the snb specifically bears the responsibility of overseeing the systemically important payment and securities settlement systems. the operators of such systems will in future have to meet certain minimum requirements, which will also include requirements with regard to information security. secure and reliable information and communications structures are an essential precondition for the smooth functioning of the financial system. in the context of its mandate, the snb limits itself to systems - relevant aspects in these areas. systems - irrelevant problems concerning individual banks or payment systems, by contrast, are explicitly not a part of its mandate. this is based on the conviction that the problems in the financial system must be solved by the market itself whenever possible.