managers in the business lines remain the " owners " of the risk, and compliance risk mitigation must be integrated into their overall business processes. the sense of ownership can be reinforced by factoring compliance ratings into performance measures and rewards. i am aware that, increasingly, organizations are tying compensation to management's ability to maintain strong internal controls and compliance processes. this practice helps keep the organization focused on managing compliance risk. to ensure that issues are escalated as they arise, the compliance staff embedded within the business lines should be independent and should have a clear reporting relationship to the corporate compliance - risk management function. in addition, to be most effective, the business line compliance staff should be " right - sized " to the level of risk within that business line. clear lines of reporting, authority, and communication are key to the success of any compliance - risk management framework. policies and procedures should spell out for business line staff how to escalate compliance concerns, should delineate responsibilities ( avoiding overlapping roles and conflicts of interest ), and should ultimately ensure that the board and senior management are fully apprised of material compliance events. monitoring and reporting as i mentioned at the start, the fundamental purpose of the enterprise - wide compliance - risk management framework is to identify, monitor, and manage compliance risk more effectively. among other things, monitoring is the means of identifying and communicating compliance breaches to the appropriate points within the organization. banking organizations are establishing processes for monitoring the implementation of compliance policies, procedures, and controls, at both the consolidated and business line levels. sound compliance - risk monitoring activities at large, complex banking organizations are supported by information systems that provide management with timely reports related to compliance with laws and regulations at the transaction level. these reports generally address monitoring and testing activities, actual or potential material compliance deficiencies or breaches, and new or changing compliance requirements. reports such as these ensure that information on compliance is communicated to the appropriate levels within the organization. monitoring and reporting enable senior management and the board to effectively carry out their respective responsibilities. at the frontier of compliance risk monitoring, larger, more complex banking organizations are moving toward the collection and analysis of quantitative information relating to compliance risk activities at the transaction level. bearing in mind that this is an evolving area, banking organizations are investing in the development and application of such information as key risk indicators and key performance indicators in order to facilitate more accurate and more timely monitoring. increased development and use of key compliance risk and performance indicators will ultimately enable better

not their terror. for sure, different regulatory regimes could have different answers regarding the best way to enforce laws and regulations. as law professors teaching both the substance of law and the practice of law, i imagine you find ways within your courses and scholarship to discuss theories of enforcement – for example, the use of private rights of action versus enforcement by regulatory agencies ; different enforcement tools such as memoranda of understanding, consent orders, and cease and desist agreements ; how these different enforcement tools are sequenced ; and whether and when violations of law should be publicized. in answering all of these questions, there is consensus that public enforcement should be used in addressing pervasive regulatory problems. today i want to talk about how home mortgage foreclosures hurt the pace of an economic recovery, and how important it is that the severe misconduct that has been uncovered in the mortgage servicing sector be addressed through intensified public enforcement of the law as part of the overarching effort to rebuild our damaged communities and neighborhoods. bis central bankers ’ speeches mortgage servicing and the economy the economic downturn that began in late 2007 and worsened considerably in the autumn of that year resulted in the worst recession in many decades. although recovery from the recession officially began in the third quarter of 2009, the pace of recovery has been modest, resulting in an unemployment rate that has remained at or above 8. 5 percent since mid2009. this sustained high unemployment rate – with all the attendant social consequences, including lost income and family strains – has contributed to an unprecedented number of mortgage foreclosures throughout the nation. this wave of foreclosures is one of the factors hindering a rapid recovery in the economy. traditionally, the housing sector, buoyed by low interest rates and pent - up demand, has played an important role in propelling economic recoveries. the increase in housing sales and construction often is accompanied by purchases of complementary goods, like furniture and appliances, which magnify the effect of the housing recovery. however, six years after house prices first began to fall, the pace of the economic recovery remains slow. nationally, house prices have fallen by nearly one - third since their peak in the first quarter of 2006, and total homeowners ’ equity in the united states has shrunk by more than one - half – a loss of more than $ 7 trillion. the drop in house prices has had far - reaching effects on families, neighborhoods, small businesses, and the economy, in part because so