bud when people speak up and senior management responds appropriately. therefore, bank leaders ought to recognize and reward those who speak up. actions speak louder than words in shaping culture. establishing appropriate incentives and fostering an environment in which people feel they can speak up would go a long way toward bolstering bank culture. i am gratified that many bank leaders and boards of directors are working hard to improve their firms ’ cultures, and i very much appreciate the g30 ’ s efforts in this area. i think most leaders recognize that good culture is fully consistent with strong financial performance, and that it helps enable banks to attract the talent needed to sustain such performance. yet, we could make greater progress more quickly if this effort were coordinated across the industry. i think bank leaders could benefit from sharing best practices and participating in surveys that would allow them to benchmark their strengths and weaknesses versus others on an ongoing basis. building a financial system that is more resilient and robust, having a bank resolution regime that credibly ends “ too big to fail, ” and building strong cultures that restore the trustworthiness of the financial industry are all goals we must continue to pursue. without success on all three fronts, i don ’ t think we can say that we have fully addressed the problems made evident by the financial crisis. thank you for your kind attention. 3 / 3 bis central bankers'speeches

clearing banks provided huge amounts of intraday credit to their tri - party repo borrowers when cash invested overnight was returned to lenders. these temporary extensions of credit have been largely eliminated. this is an important structural reform because these exposures had proven to be destabilizing during the financial crisis. in particular, when a major dealer became stressed, the clearing banks were motivated to reassess their large overdraft exposures to the dealer, and that turned out to be an important channel of contagion. another important change has been the shift in over - the - counter derivatives activity from bilateral settlement to central clearing. although this shift was already underway at the time of the financial crisis, it has now been underpinned by important changes to the capital and collateral regime, which has accelerated the process by strengthening the incentives to structure and clear trades centrally. when banks settle their trades with central counterparties ( ccps ), it reduces risk in the system. exposures can be netted, and the counterparty risk is shifted from many individual firms to the single ccp that clears the trades. although this shift in clearing activity still has some way to go, the proportion of centrally cleared trades will continue to rise as legacy trades mature. a third important structural change is the increased focus on the strength and resiliency of ccps. because ccps are now going to play a more significant role, they must be strong and resilient. there have been many important initiatives in this regard. foremost, perhaps, is the promulgation of the international standards embodied in the principles for financial market infrastructures ( pfmi ) — which were developed when i chaired the committee on payment and settlement systems ( cpss ) — and the work currently underway on financial market infrastructure resolution. a fourth significant structural change has been reform of the u. s. money market mutual fund industry. the october 14th implementation of floating net asset values ( navs ) for prime institutional money market mutual funds has dramatically reduced their use and has encouraged banks and other borrowers to find sources of funding that are less prone to runs. the financial crisis exposed two important flaws of the money market mutual fund industry. first, the fixed nav structure created a first - mover advantage that encouraged runs. that is, if a fund came under stress, investors who quickly withdrew their funds received par value. second, although money market mutual fund investments are often collateralized, the funds themselves have no desire to take possession