ensure that staff members throughout their organizations understand the compliance objectives and each member's role in implementing the compliance program. the compliance function should be independent of management whose activities it reviews and monitors. an enterprise - wide compliance - risk management program should be dynamic and proactive, meaning it constantly assesses evolving risks when new business lines or activities are added or when existing services or processes are altered. to avoid having a program that operates on " autopilot, " an organization must continuously reassess its risks and controls and train employees to effectively implement those controls. an integrated approach to compliance - risk management can be particularly effective for u. s. bank secrecy act and anti - money - laundering ( bsa / aml ) compliance. often, the identification of a bsa / aml risk or deficiency in one business activity or subsidiary can indicate potential problems or concerns in other activities across the organization. a primary concern for international banking organizations continues to be controlling bsa / aml risk effectively across their various operating units in the united states. we recognize the commitment that organizations have made to compliance with bsa / aml requirements, and, in return, we continue to work to ensure that obligations in this area are clearly communicated to banking organizations and examiners alike. the federal reserve strives to provide clear and comprehensive guidance that directly communicates our expectations to the institutions we supervise. this year, the u. s. banking agencies published an updated federal financial institutions examination council ( ffiec ) bsa / aml examination manual to cover new regulatory issuances and respond to industry requests for further guidance. we expect to issue annual updates to the manual to cover developments in this evolving area of risk. the ffiec bsa / aml examination manual reflects a common view of the federal banking agencies and the u. s. treasury department's financial crimes enforcement network ( fincen ) with regard to bsa / aml compliance expectations. the agencies universally stress that the purpose of a bsa / aml examination is to assess the overall adequacy of a banking organization's bsa / aml controls, in view of that particular organization's lines of business and customer mix. focusing on the bsa / aml process across the enterprise is critical to ensuring that resulting controls are risk - based, so that resources are directed appropriately. together with our u. s. treasury and law enforcement counterparts, we are working to disseminate information about perceived money - laundering or terrorist -

a ten - day holding period and a 99 percent confidence interval, thereby creating potential arbitrage opportunities between the banking book and the trading book. the u. s. agencies issued their proposals to revise market risk capital requirements at the same time as the basel ii proposals, and we seek comment on the market risk proposals as well. notably, in the united states we would continue to have banks with significant trading book activity hold additional capital for the risks inherent in that line of business, whether they remain basel i banks or move to basel ii. given the international composition of this audience, i want to offer a few thoughts about the crossborder issues related to basel ii implementation. as you know, the u. s. agencies participate with other national supervisors in the accord implementation group and other groups to identify differences in implementation and discuss possible ways to harmonize rules and thereby reduce burden on crossborder banking organizations. we recognize that the adoption of differing approaches to basel ii by various countries may create challenges for banking organizations that operate in multiple jurisdictions, but it is good to remember that cross - border banking has always raised specific challenges that supervisors from various countries have worked hard to address. let me assure all bankers here that supervisors are aware that the process of adopting national versions of basel ii has heightened concerns about home - host issues. the federal reserve and other u. s. agencies have, for many years, worked with international counterparts to limit the difficulty and burden that have arisen as foreign banks have entered u. s. markets and as u. s. banks have established operations in other jurisdictions. we encourage bankers that have questions and concerns about home - host issues to promptly communicate with their regulators in all jurisdictions so that the issues can be addressed. enterprise compliance risk management and bsa / aml i would now like to turn to another area of the financial sector that regulators are focused on : compliance - risk management. this type of risk may result when an organization fails to comply with the laws, regulations, or standards or codes of conduct that are applicable to its business activities and functions. the federal reserve expects each banking organization to have a compliance infrastructure and culture in place across the entire institution that can identify and effectively control the compliance risks it faces. to create appropriate compliance - risk controls, organizations must first understand risks across the entire entity. managers should be expected to evaluate the risks and controls within their scope of authority at least annually. i also emphasize the need for the board of directors and senior management to