richard dzina : advancing the fed's wholesale services in an era of unprecedented challenge and change remarks by mr richard dzina, executive vice president of the financial services group of the federal reserve bank of new york, at the securities industry and financial markets association's operations conference and exhibition 2017, boca raton, florida, 9 may 2017. * * * thank you and good morning. in leading the federal reserve ’ s wholesale services i am continually reminded that my stewardship responsibilities for this extraordinary business run in at least three directions. organizationally, i am accountable to principals across the federal reserve system and to the directors of the federal reserve bank of new york. managerially, i am accountable to the men and women who make this business function, as capable and as dedicated a cadre of public servants as has served our nation anytime, anywhere. operationally, and the sensation i feel most keenly standing before this audience of industry leaders, i am accountable to our depository institution customers, and their end users, which rely upon our services to send and receive time critical payments ; to transfer, maintain, and provide safekeeping for fedwire - eligible securities ; and to settle positions derived from transactions in other markets. i ’ d like to thank sifma for the opportunity to participate in today ’ s program, and for the visceral reminder of accountability that comes with this invitation. i have long maintained that the federal reserve ’ s wholesale services represent the franchise when it comes to our nation ’ s financial market infrastructure. it is a bold assertion, but not necessarily an unreasonable one, reflecting the dollar value of transactions processed across the fedwire funds, fedwire securities, and national settlement services ; the interconnectedness and dependencies between these services and other systemically important infrastructures ; our role as central securities depository and as fiscal agent for the issuance, maintenance, and redemption of all fedwire - eligible securities ; and as the platform across which the federal reserve ultimately settles its monetary policy operations. any one of these elements would likely qualify the wholesale services as “ systemic ” ; in the aggregate they represent a staggering portfolio on which the execution of both our nation ’ s fiscal and monetary policies ultimately depends. in recognition that a wholesale service outage risks a significant shock to the united states, and in light of the escalating threat landscape in which collectively we operate, last year before this audience i shared a series of reflections endeavoring to advance a new paradigm for resili

is complex far beyond the security and resiliency domain. financial market infrastructures face an unprecedented volume of technological change, market developments, and regulatory scrutiny. for the fedwire funds service, at least two market developments promise to have major strategic implications over a 3 - 5 year horizon : the advent of real time retail payments, which the federal reserve is actively promoting as a desired outcome in its strategies for improving the payments system ; and the trend toward global adoption of iso 20022 payment message standards. for the fedwire securities service, the successful modernization in november 2015 of the application suite and hardware platform supporting this critical business presents an historic opportunity to articulate a future vision that responds to customer and stakeholder needs. straddling both domains, the emergence of new technologies such as distributed ledgers presents both challenge and opportunity. a key desired outcome identified in the federal reserve ’ s strategies for improving the payment system ( sips ) is to increase the speed of retail payments. an unmistakable global trend toward real time retail payments has emerged reflecting the advent of new technologies, the rapid pace of private sector innovation, the proliferation of mobile payment devices, and the recognition that a world of 24x7 commerce requires a payment system that can keep pace. as this trend inevitably accelerates, the question of interbank settlement to address credit exposures that may accumulate outside of conventional banking hours must be addressed. reflecting the federal reserve ’ s historical interest in the mitigation of settlement risk, and in anticipation of the emergence of real time retail payments in the united states, we are currently exploring an expansion in operating hours of the national settlement service to support the final and irrevocable settlement of interbank positions in central bank money. we are pursuing this interest in three phases. in 2015, we expanded the nss operating window modestly, opening an hour earlier at 7 : 30am and closing a half hour later at 5 : 30p. m. subsequently, we announced our readiness to open nss as early as 9 : 00 p. m. on the prior calendar date, consistent with the operating window of the fedwire funds service, if requested. finally, we are currently evaluating prospects for weekend settlement hours, perhaps encompassing a 24x7 operating window for nss, for which we are validating demand prior to finalizing our direction. it is critical to consider these matters in advance of the advent of real time retail payments to anticipate the needs of customers and to respond to the interests of policy