lael brainard : building a safer payment system speech by ms lael brainard, member of the board of governors of the federal reserve system, at the federal reserve bank of kansas city conference “ the puzzle of payments security : fitting the pieces together to protect the retail payments system ”, kansas city, missouri, 25 june 2015. * * * thank you for the opportunity to speak to you today. i especially want to thank federal reserve bank of kansas city president esther george for her leadership in the initiative that has brought us all together here today to discuss improvements to the u. s. payments system. we have a diverse group of professionals participating in this conference, from industry, academia, and government. it takes all of us, working together, to maintain and enhance a safe and secure payment system. the payment system touches our daily lives, whether it ’ s a consumer paying a bill, a company deciding to upgrade its point - of - sale terminals, a technology startup developing a new peer - to - peer payment app, or the government issuing tax refunds. americans make more than 120 billion noncash payments each year. 1 but it ’ s only when something goes wrong, like a data breach at a major retailer or bank, that the typical end user takes notice of the payments process. as the central bank of the united states, the federal reserve plays many roles in the payment system, including payment system operator, supervisor of financial institutions and systemically important financial market utilities, regulator, researcher, and catalyst for improvement. most of you are aware of our current efforts to improve the speed, efficiency, and security of our payment system. i ’ d like to discuss that project for a few minutes, and then talk about four things that we should all be doing to enhance payment security. for some years, members of the public have told us with increasing frequency and intensity that they see the united states falling behind other nations in the speed and security of our payment system. we hear all the time that the federal reserve should do something about this. but, despite our multiple roles, the federal reserve does not have broad authority to simply restructure or redesign the payment system. so, two years ago, the fed published a consultation paper that sought public input on ways to make the u. s. payment system safer, more accessible, faster, and more efficient from end - to - end. 2 as we evaluated the substantial volume of public comment in response to the paper, the fed also

susan schmidt bies : sound capital and risk management remarks by ms susan schmidt bies, member of the board of governors of the us federal reserve system, at the oprisk usa 2006 conference, new york, 29 march 2006. * * * i would like to thank the sponsors of oprisk usa for providing an opportunity for bankers, regulators, consultants, and other interested parties to share their perspectives on operational - risk management. today, i will speak about the importance of risk management and its relationship to capital. i will also touch on the broad objectives of effective operational - risk management and offer specific observations on some of the challenges of operational - risk quantification. in addition, i will describe the current status of the basel ii process. importance of risk management over the past several decades, we have witnessed substantial changes in the u. s. banking industry, particularly at our largest institutions. these very large entities have broad geographic reach, operate in many lines of business, and offer a wide array of complex products and services. the largest institutions have moved away from the traditional banking strategy of holding assets on the balance sheet and have adopted strategies that emphasize redistribution of assets and active management of risks. the risk - management techniques employed by banking organizations continue to improve and adapt to the ever - changing financial landscape. the federal reserve, in its role as both a bank supervisor and the nation's central bank, has an obvious interest in maintaining the stability of the banking industry and the financial system as a whole. we, along with our counterparts at the other u. s. bank and thrift regulatory agencies, are responsible for ensuring that banking institutions operate in a safe and sound manner and have strong capital levels. but with the advent of very large banking organizations that engage in a wide variety of business activities - - some of them quite complex - - the federal reserve has become even more interested in ensuring that banking organizations understand the risks of these activities. for their part, bankers continue to improve the risk - management and risk - measurement processes at their institutions, and regulators have supported these efforts. banks themselves have created many of the new techniques to improve their risk management and internal economic capital measures in order to be more effective competitors and to control and manage their losses. by more clearly defining risk exposures and identifying the causes of and controls for their losses, bank management can more effectively integrate decisions about risk - taking into their strategic and tactical decisionmaking. banks that integrate risk measurement into their business - line goals often