based upon a forward - looking assessment of the losses that would be suffered under hypothetical adverse economic scenarios, so that capital will be built and maintained at levels high enough for the firms to remain viable financial intermediaries even under such stressed conditions. in addition to the microprudential improvement that comes from substituting a dynamic for a static capital calculation, there is an important macroprudential motivation, reflected in the design of scenarios and the required levels of post - stress capital. the efficacy of the ccar process is substantially enhanced as the information systems and internal risk - management capacities of the firm improve. beyond this important, but discrete regulatory measure, well - developed processes for determining risk appetite give supervisors better insight into risks specific to the activities and strategic decisions of each firm. as a result, supervisors should be better able to identify points at which a firm ’ s risk - taking may diverge from that which is consistent with microprudential and macroprudential objectives. this, in turn, should permit more timely supervisory or regulatory responses. regulatory objectives and fiduciary duties the regulatory focus on risk in corporate governance will produce additional examples of each of the three kinds of measures i have just described. for instance, the office of the comptroller of the currency has recently proposed guidance for risk governance at large national banks. 16 still, particularly with an audience half composed of corporate law an mra is a supervisory finding that the federal reserve communicates to the firm and requires remediation. for more information, see board of governors of the federal reserve system, division of banking supervision and regulation ( 2013 ), “ supervisory considerations for the communication of supervisory findings, ” supervision and regulation letter sr 13 – 13 ( june 17 ). u. s. department of the treasury, office of the comptroller of the currency ( 2014 ), guidelines establishing heightened standards for certain large insured national banks, insured federal savings associations, and insured federal branches ; integration of regulations, 79 fed. reg. 4282 ( january 27 ). bis central bankers ’ speeches professors, it is natural to ask whether corporate law tools might usefully supplement regulatory measures. specifically, the question arises as to whether the fiduciary duties of the boards of regulated financial firms should be modified to reflect what i have characterized as regulatory objectives. doing so might make the boards of financial firms responsive to the broader interests implicated by their risk - taking decisions even where regulatory and supervisory measures had not anticipated

unclear and, at the same time, could introduce significant risks and tradeoffs. that said, recognizing the interconnected and global nature of the financial system, i see value in continuing to research and understand the underlying technology and associated policy implications as other jurisdictions continue to actively pursue cbdcs. doing so ensures we are aware of and can be responsive to any developments and can continue to support a safe and efficient financial system into the future. stablecoins but a cbdc is just one potential piece of the evolving payments landscape. another alternative to traditional forms of money and payment, or to a cbdc, is stablecoins. this form of payment emerged primarily to support the trading of cryptoassets but increasingly has been proposed as an alternative to traditional payments and as the federal reserve ’ s initial analysis suggests that a potential u. s. cbdc, if one were created, would best serve the needs of the united states by being privacy - protected, intermediated, widely transferable, and identity - verified. see board of governors of the federal reserve system, “ money and payments : the u. s. dollar in the age of digital transformation ” ( washington : board of governors of the federal reserve system, january 2022 ), https : / / www. federalreserve. gov / publications / files / money - and - payments20220120. pdf. - 6a store of value. stablecoins purport to have convertibility one - for - one with the dollar, but in practice have been less secure, less stable, and less regulated than traditional forms of money. digital assets used as an alternative form of money and payment, including stablecoins, could pose risks to consumers and the u. s. banking system. therefore, it is important to understand risks and tradeoffs associated with digital assets and new arrangements used for banking and payments. while i support responsible innovation that benefits consumers, i caution against solutions that could disrupt and disintermediate the banking system, potentially harming consumers and contributing to broader financial stability risks. and, where the activity happens outside the regulatory perimeter, consumers would be left without the adequate protections that our regulated and supervised banks provide today in the united states. a comprehensive regulatory framework for these reasons, my vision for responsible innovation includes a clear and sensible regulatory framework, where we incorporate what works well today in the u. s. banking system, allowing for private sector innovations within established guardrails. within this framework