plan that employs two different models for stressed assets resolution and recognizes the concomitant need for bank resolution. i will provide the plan in detail to make the point that it can be done. what i enunciate should be viewed as an attempt to address all dimensions of the problem. its individual parts are, however, not meant to be cherry - picked by or for the constituency favored by it. that would not work well. so here it is. 1. model i : private asset management company ( pamc ). this plan would be suitable for sectors where the stress is such that assets are likely to have economic value in the short run, with moderate levels of debt forgiveness. i conjecture based on anecdotal observations that sectors such as metals, epc, telecom, and textiles, qualify for this. 1. in terms of timeline, the banking sector will be asked to resolve and restructure, say its 50 largest stressed exposures in these sectors, by december 31, 2017. the rest can follow a similar plan in six months thereafter. 2. for each asset, turnaround specialists and private investors – other than affiliates of banks exposed to the asset – will be called upon to propose several resolution plans. each resolution plan will lay out sustainable debt and debt - for - equity conversions for banks to facilitate the issuance of new equity and possibly some new debt to fund the investment needs. we may have to consider that the sustainable portion of bank debt does not have to be greater than some minimum amount, so as to allow for a large haircut if necessary for economic recovery of the asset. each plan would lay out cash flow prospects, whether the promoter stays or not, and if yes, with what stake. 3 / 6 bis central bankers'speeches 3. each resolution plan would then get vetted and rated by at least two credit rating agencies to assess the financial health ( interest coverage ratio, leverage, etc. ), economic health ( sector, margins, etc. ), and management quality ( promoter or the new team ). the rating would be for the asset and not just for bank debt in case additional debt is issued under the plan. 4. feasible plans would be those that improve the rating of the asset ( presently likely to be “ c ” or “ d ” ) such that minimum of the two credit ratings is at or above a threshold level, e. g., at least just below the investment - grade level. the intention is that the

but we must be honest with each other about what we ’ re doing, what we ’ re not doing, and how we can improve. let me highlight just one example to demonstrate why i am so focused on financial crime right now. as i ’ m sure many of you have read, in february 2016 international criminals used fraudulent wire transfer instructions to steal and launder many millions of dollars from bangladesh bank ’ s account at the new york fed. bangladesh bank is the central bank of bangladesh. some of those funds have been recovered, but bangladesh bank is still working to recover most of its loss. we at the new york fed are still helping them to do so. simply put, it was not just bangladesh bank that was wronged. the new york fed — my client and employer of more than 20 years — was wronged as well. so i come to you today not as a dispassionate observer. i come to you today bearing the scrapes and bruises and scars of our own experience at the new york fed. this morning, i will speak about where we are and where i think we should go from here. my message, in brief, is that we are all in this together. the integrity of the payment system is critical to the u. s. and global economy. financial institutions and the official sector must do their utmost to protect the system from financial crime. 1 / 6 bis central bankers'speeches where are we now? the payment system can be used to facilitate many types of crime. fraud and theft have accompanied money transfers for as long as there has been money. the romans considered counterfeiting to be a form of falsum, which was a fraud against the public. 2 and, of course, willie sutton provided the timeless, common - sense explanation for bank robbery. money laundering is, by contrast, a more recent development in criminal law. in the united states, anti - money laundering law reflects an evolution in focus from banknote tracking to combatting narco - trafficking to counterterrorism. rather than take you through the legislative history of this evolution, i want to refer you to the financial crimes enforcement network — or “ fincen, ” for short. its website contains short and accessible histories of major anti - money laundering laws. 3 these summaries highlight the important public goals of the bank secrecy act and other anti - money laundering statutes — why they are more than just a compliance cost. one theme that emerges is the increasing reliance on