is not clear to me that these risks are fully priced into the market. market forces may not have been able to correct any excess optimism given the incentives and constraints of participants operating in a world with a good deal of opaqueness about risk taking. in closing, i would stress that i am not saying market participants should avoid risk. but i do think it is important that market participants recognise that risk has not gone away, and that there are limits in the ability of financial engineering to insulate the financial system in aggregate against risk. given the rapid pace of innovation in financial markets and products and the low level of risk premia, investors may need to take particular care to understand the risks they are exposed to. more than in the past, they may need to ask some searching questions about how funds are being invested and how risks are being managed. one approach might be to put greater emphasis on stress test results as well as more conventional risk metrics. failure to ask probing questions could prove costly for those directly involved – and, of greater concern, to others in the system – as and when the credit cycle turns.

a common understanding of what constitutes “ good ” evaluations and robust evidence. regarding analytical guidance, the framework stipulates that each fsb evaluation should answer three key questions. first, did the reforms “ cause ” an outcome ( “ attribution ” )? second, did the reform have similar effects across markets, states of the world, or jurisdictions and regions ( “ heterogeneity ” )? did the reform achieve its overall objective ( “ general equilibrium ” )? in the spirit of the undogmatic concept outlined above, the answers to these questions should provide detailed information to policymakers on the impact of their policies on observed economic outcomes. they should enable informed policy discussions without pre - empting decisions regarding adjustments of policies. the first two evaluations under the framework were delivered to the g20 - summit in november 2018. the first project investigated to what extent post - crisis reforms incentivized central clearing of otc - derivatives. the second project evaluated the effect of reforms on the financing of infrastructure. 9 more projects are underway. an evaluation of reform effects on sme financing will be delivered to the g20 - summit this year with a consultation report published soon – open to comments from all stakeholders. another project considering the fsb ’ s reform agenda on ending too - big - to - fail ( tbtf ) has just started. this evaluation project will assess whether reforms are effective in reducing the systemic and moral hazard risks associated with systemically important banks. it will also examine the broader effects of the tbtf - reforms on the overall functioning of the financial system. the final report is scheduled for the g20 - presidency in 2020. 10 b ) macroprudential policy macroprudential policy11 is a relatively new policy field. its goal is to preserve financial stability and to prevent the build - up of systemic risk that may have adverse effects for the functioning of 2 / 7 bis central bankers'speeches the financial system and for the real economy. new institutions have been tasked with the implementation of macroprudential policies, and new policy instruments have been introduced. nonetheless, uncertainty about the state of the financial system and the effects and effectiveness of these policy instruments is high. this uncertainty entails two risks : the risk of acting too late ( inaction bias ) and the risk of choosing an inappropriate instrument or inadequate calibration. both risks can be mitigated if macroprudential policy is embedded in a structured policy process. such a policy process