identify risk and what to do about it. you could see it, measure it, and fortify against it. but, as the world has changed, so have the risks that demand our attention and our resources. the new risks are harder to predict and inherently ambiguous : steel and concrete can do little to protect us. our reliance on technology means we need to think differently about cyber risk. the importance of innovation and intellectual property means we need to look for new approaches to talent and culture. and the threat posed by climate change means we need to give serious consideration to the resilience of our physical and digital infrastructure. the new york fed has the appearance of an historic institution, but behind the stone facade 1 / 2 bis central bankers'speeches we ’ re grappling with these issues in the same way that you are. in our economic research, our supervision of financial institutions, the payments systems we operate, in short – in all that we do. talent, technology, and innovation challenge us every day. they create incredible opportunity, but they also test us by exposing new vulnerabilities. i know that over the next couple of days there will be lots of valuable insights shared by experts about how to handle the challenges posed by big data, cryptocurrency, and climate change. but first, to kick off the conference, it ’ s my pleasure to introduce john dugan, chair of citigroup. citigroup has operations in over 150 countries, with about 200 million customer accounts worldwide. 2 as head of a global employer with complex, international operations, john is no stranger to the changing nature of risk. john became chair of citigroup at the start of this year. prior to that he was chair of the financial institutions group at the law firm covington & burling llp, where he spent much of his career. he has also held a number of public sector roles, including comptroller of the currency during a critical time for our financial system and economy, from 2005 – 2010. i ’ m looking forward to his insights and i know they will be the catalyst for some rich discussion. please join me in welcoming john dugan. 1 the information in this speech on the history of the new york fed ’ s headquarters building comes from about the building on the new york fed ’ s website. 2 citigroup, third quarter 2019 results and key metrics, october 15, 2019. 2 / 2 bis central bankers'speeches

the forces that may cause it to depreciate. since the new york fed began to highlight the need for a focus on culture reform in financial services, measurement has consistently been raised as a challenge. while measuring culture may not be as straightforward as measurement approaches for more traditional assets and risks, it is possible to gain valuable insights through a multi - layered and patient approach. through the use of surveys, interviews, focus groups, behavioral analytics, network analyses, and board effectiveness assessments, firms can triangulate from multiple inputs and develop a view of how high or low their cultural capital is, both in an absolute and relative sense. at a 2017 conference, hosted by the new york fed, representatives from across the industry came together to discuss how boards of directors assess their firms ’ cultures, hold management accountable, the benefits of data and benchmarking, and finally, the role of performance management and incentives. 4 since then, several firms have started to use big data to perform network analysis to understand how culture is transmitted through an organization. others have further honed their ability to gather qualitative data and interpret it in new ways. there is a greater recognition that there are no simple and straightforward metrics to tell them where they stand vis - a - vis cultural capital. 5 rather, these firms are regularly experimenting with new ways to identify patterns within complex systems that are continuously evolving. a number of firms have recognized that the data they gather must be contextualized. cultural capital is not a single statistic ; one part of a firm could have generous stores of it, while another department or geography requires more focused investment and attention. from the accumulation perspective, building cultural capital means investing in the way the organization approaches everything it does, including defining its purpose, setting its business strategy and risk appetite, training, communications, decision - making, prioritization, compensation practices, and how employees are incented to interact with colleagues, clients, and customers. a critical part of sustained investment is that business leaders and boards of directors see it as their responsibility to set the tone from the top. modelling the desired behaviors sets a powerful example and serves as a form of behavioral risk mitigation. all of these actions reflect choices that a firm makes, either implicitly or explicitly, that can build cultural capital. on the other hand, cultural capital can also decline or deteriorate as a result of internal choices. for example, overt incidences of misconduct such as a trading scandal or a legal