some cases, in operating subsidiaries. the umbrella supervisor will have to keep other regulators informed so they can do their job as well. we have had some experience as bank regulators in managing these kinds of communications. the federal reserve has worked hard with state banking authorities and with the occ to increase the coordination of our examination and supervisory efforts, and we will continue to look for ways to improve this coordination as we also move to improve communication and coordination with functional regulators of the non - bank activities. the proposed blend of functional and umbrella supervision is one of several models for the supervision of diversified financial services firms that include a bank. the united kingdom, australia, switzerland, and some other countries have moved to a very different structure that relies on a single consolidated financial services regulator and eliminates supervisory and regulatory responsibilities at the central bank. in this approach, the single regulator supervises bank and non - bank activities alike. some see this structure as the wave of the future, given the blurring of distinctions between financial services. i wish our colleagues abroad the best of luck, but i think their legislatures have made a mistake. the argument is that in a market that has increasingly eroded differences among and between financial institutions, the uniqueness of banks has declined and the combining of financial institution regulators and adoption of similar, if not identical, regulations makes sense. adding a powerful single regulator to a powerful and independent central bank would create an entity with significant authority outside the day - to - day direct purview of government, so governments have opted to combine the regulators and strip the supervisory and regulatory power from the central bank. but please note that they have continued to make their central banks responsible for financial stability. while macro financial tools and monetary policy may be sufficient to do that job most of the time, supervisory and regulatory policies have important economic and stability implications. particularly in a crisis, a central bank without knowledge of the way markets actually operate – knowledge that can gained only by experience and hands - on contact with banking organizations – will be, if you will excuse an ex - professor ’ s metaphor, at risk of failing its final exam. as a result, i think the separation of central banking and supervision and regulation is dangerous. the supervisory and regulatory approach in the united states, as embodied in financial modernization legislation that the federal reserve supports, is quite different from the trend abroad. it provides an important role for the central bank in the process as an umbrella supervisor. it also makes an important distinction between the insured depository

- defined underlying markets and are consistent with internationally - recognized standards are available. i want to thank the many institutions here today, and the many more that have played equally constructive roles, for their efforts in this process. this month marks the one - year anniversary of sofr and is close to the one - year anniversary of the other new risk - free rates. over that year, we have seen the establishment of new futures markets, cleared swap markets, and debt markets based on these new rates. sofr futures, which did not exist a year ago, have seen more than $ 7 trillion in cumulative notional volumes. this has been a crucial development for market liquidity and is helping to spur the growth of sofr swaps and other derivative markets. and sofr is being used in cash products, with $ 81 billion in sofr - linked debt issued over the past year. new markets do not arise overnight — in normal circumstances they can often take decades to develop. what has been accomplished over the past year is remarkable. at the same time, we have only a little over two and a half years until the point at which libor could end, and the transition needs to continue to accelerate. the private sector needs to take on this responsibility, and we expect you to do so. the federal reserve ’ s supervisory teams are including the transition away from libor in their monitoring discussions with large firms. the federal reserve will expect to see an appropriate level of preparedness at the banks it supervises. as the alternative rate reference committee ( arrc ) continues to make progress on industry - led 1 / 2 bis central bankers'speeches approaches to the transition, the transition paths away from libor will become clearer for banks of all sizes. while we expect you to take on this responsibility, we in the public sector must also recognize our need to help. the fsb has supported this transition globally, and, in the united states, the financial stability oversight council has supported the arrc ’ s work. it is important that we continue to do so, and i want to thank you all today for the thoughts you have shared with us on this transition and what is needed to make it succeed. 2 / 2 bis central bankers'speeches