, software updates and data backups. moving forwards, more attention needs to be placed on containing systemic risks that threaten the entire financial system which may arise from these new technologies, products and services. two weeks ago we experienced what a large impact on everyday life the failure of a major card network can have. it is crucial to have payment and settlement systems that function under all circumstances to prevent the economy from being disrupted. the objective is to develop a framework which guarantees the operational integrity of all critical infrastructure that are also shared by financial market. i am confident that we can reach this target in good cooperation between the financial industry and the authorities. 1 / 2 bis central bankers'speeches going forward, the industry landscape will look more diverse, with different kinds of companies, both small and large, providing financial services. it is important that the authorities actively monitor the structural transformation, maintain financial stability and do their part in ensuring that the use of digital financial services is safe and reliable. we need both the experience and stability of the established institutions, as well as the agility and innovative spirit of the newcomers. at the same time, to ensure fair and uniform operating environment, entities who offer similar products or services ought to be subject to the same rules and regulatory oversight. today is the final day of our three - day conference money in the digital age. on tuesday and wednesday, we hosted an academic seminar, and we were deeply impressed by the brilliant work presented there. today we will complement that work with insights from leading industry players. i wish you all will enjoy the programme, and i look forward to continuing the dialogue with you also after the event. 2 / 2 bis central bankers'speeches

daniel k tarullo : the international agenda for financial regulation speech by mr daniel k tarullo, member of the board of governors of the federal reserve system, at the american bar association banking law committee fall meeting, washington dc, 4 november 2011. * * * long before the recent financial crisis, banking regulation had acquired an important international dimension. the crisis renewed attention to the interconnectedness among national financial markets. in its aftermath, accordingly, the international focus on banking regulation has grown even more extensive. today i will discuss three subjects germane to the increasingly significant international regulatory agenda. first are the steps needed to complete the reform agenda on capital and liquidity standards, including some implementation issues in the united states. second are areas that i believe should be priorities for international work in 2012 – cross - border resolution of financial firms, wholesale funding markets, and over - the - counter ( otc ) derivatives reform. and third are some institutional changes that will be required in the relevant international bodies to assure that they fulfill their promise of promoting a safe and efficient international financial system. before turning to these topics, i think it important to state the goals that should inform u. s. involvement in international financial regulatory efforts. in recognition of the fact that financial distress can quickly and dramatically cross national borders, we seek to protect our own financial system by promoting the adoption of strong, common regulatory standards and effective supervisory practices for large financial firms and important financial market infrastructures around the world. such standards and practices can also help prevent major competitive disadvantage for u. s. firms. completing the agenda on minimum capital and liquidity standards strong capital and liquidity standards are central to these goals and to the overall reform agenda for financial regulation. the crisis showed that liquidity problems can be an independent source of severe stress, perhaps even for firms that might otherwise have remained solvent. but it also confirmed that capital standards themselves had been wholly inadequate in a number of respects : required capital levels were much too low, particularly trading book capital requirements. in evaluating the condition of financial firms at the height of the crisis, markets focused on common equity ratios and virtually ignored the tier 1 ratio enshrined by basel i and basel ii. moreover, markets and supervisors both used a much more forward - looking capital calculation than under prevailing regulatory requirements – subtracting losses that they estimated would be sustained in an adverse scenario to determine whether firms would have enough capital to remain viable financial intermediaries. finally, the significant interconnectedness