00 am 12 : 00 pm 1 : 00 pm 2 : 00 pm 3 : 00 pm 4 : 00 pm 5 : 00 pm 8 : 00 am 9 : 00 am 10 : 00 am 11 : 00 am 12 : 00 pm 1 : 00 pm 2 : 00 pm 3 : 00 pm 4 : 00 pm 5 : 00 pm 8 : 00 am 9 : 00 am 10 : 00 am 11 : 00 am 12 : 00 pm 1 : 00 pm 2 : 00 pm 3 : 00 pm 4 : 00 pm 5 : 00 pm 8 : 00 am 9 : 00 am 10 : 00 am 11 : 00 am 12 : 00 pm 1 : 00 pm 2 : 00 pm 3 : 00 pm 4 : 00 pm 5 : 00 pm 15, 000 2 / 2 / 2018 2 / 5 / 2018 trace volume ( lhs ) 2 / 6 / 2018 2 / 7 / 2018 market depth ( top 3 levels, rhs ) source : board staff calculations, based on trade reporting and compliance engine ( trace ) data from the financial industry regulatory authority ( finra ) ; brokertec. volumes are over five - minute intervals. millions of dollars millions of dollars february 2 - 7, 2018, intraday market depth and volume figure 7 average intraday volume per five - minute interval 3 : 00 to 3 : 05 pm billions of dollars dealer - to - client ( dtc ) dealer - to - dealer ( dtd ) interdealer broker ( idb ) note : key identifies regions in order from bottom to top. source : board staff calculations, based on trade reporting and compliance engine ( trace ) data from the financial industry regulatory authority ( finra ). sample is from august 1, 2017, to july 31, 2018. volumes are averaged over five - minute intervals. figure 8 average daily volume by settlement t + 0 : 4 % billions of dollars t + 1 : 83 % t + 2 t + 3 t + 4 t + 5 > t + 5 t + 0 t + 1 source : board staff calculations, based on trade reporting and compliance engine ( trace ) data from the financial industry regulatory authority ( finra ). sample is from august 1, 2017, to july 31, 2018.

of my portfolio? indeed, the special skills of banks in evaluating and taking credit and market risk is what banks have leveraged in taking part in the financial revolution spawned by the technical revolution. nonetheless, the nature of the newer products and the relationship with counterparties have meant that risks now manifest themselves in a different way and that banks can modify their risk exposures much more rapidly than ever. technology and the enhanced ability to capture and use data have changed risk taking and its management in several areas : securitization, credit scoring, and modeling for pricing and capital allocation, to name three. but no finer example of the revolutionary changes made possible by technology can be found than derivatives. banks and other creators of derivatives can now slice and dice risks associated with a wide spectrum of underlying assets. derivatives can be used to hedge risk for the bank or its customers. examples include interest rate swaps designed to make counterparties more comfortable with their interest rate exposures and credit derivatives designed to reduce correlations of risk in a loan portfolio. of course, either of these instruments can be used to take risk if the holder opts to hold the uncovered exposure, avoiding the cost of acquiring the underlying assets. moreover, a bank can change its position quickly - - limiting a loss, diversifying or hedging a risk, or closing out a position. derivatives, of course, do more than allow the taking or hedging of risk. they also permit the holders to combine and separate risks to mimic virtually any financial activity. they thus limit what regulators can prohibit, blur distinctions between instruments regulated by different regulators, and virtually eliminate functional and other distinctions among commercial banks, investment banks, insurance companies, and other financial institutions. supervising the future financial services holding company when it comes to considering how technology and new products have affected supervision - - especially of the future financial services holding company, with its wider powers - - i must begin by repeating an earlier comment : banking organizations are still in the risk business - taking it, managing it, profiting from it, and when they make the wrong decision or have bad luck, bearing losses and perhaps even failing. and the basic risks still are credit and market risks. the same expertise banks used for old - fashioned loans and their funding is still what they do for derivatives, securitizations, and credit scoring. that having been said, however, one must quickly add that the new instruments and procedures raise real questions about both managing and supervising risk by instruments and /