john c williams : global issues, global implications remarks ( via videoconference ) by mr john c williams, president and chief executive officer of the federal reserve bank of new york, at the central reserve bank of peru ( bcrp ) centenary conference, 25 march 2022. * * * as prepared for delivery it ’ s a great honor for me to participate in this event commemorating the centenary of the central reserve bank of peru. i want to start by congratulating julio and everyone at the bank on this special and significant anniversary. i am looking forward to a time, hopefully soon, when we can come together, enjoy some ceviche, and celebrate in person. and while it ’ s not nearly as enticing as a gathering over fine peruvian food, i need to give the standard fed disclaimer that the views i express here are my own and do not necessarily reflect those of the federal open market committee ( fomc ) or anyone else in the federal reserve system. given this special occasion, let me begin with some reflections on the importance of communication and engagement in central banking. shared concerns as central bankers, we have long understood the value of engaging with colleagues around the world on the challenges we face in our own countries. we all operate in a highly interconnected global economy and financial system. and we have many of the same goals, including price stability, vibrant economies, and financial stability. many of the issues we face are not unique to any one of us, but rather are shared across the region and the globe. recent events, from the covid - 19 pandemic to the war in ukraine, have only underscored the importance of active dialogue and transparency among central banks. beyond the global economic impact of these events, it ’ s important to emphasize that the pandemic is first and foremost a public health crisis, and that the russian invasion is inflicting tremendous hardship and suffering on the ukrainian people. in terms of economic impacts, all of us in the americas were affected by lockdowns and shutdowns at the start of the pandemic. all of us have faced supply - chain bottlenecks and imbalances, as people around the world shifted their spending habits — buying more goods and spending less on services. and many of us are now confronting a sharp rise in inflation, especially for food and energy, which is hardest on our most vulnerable populations. of course, each country is facing its own set of circumstances, and each

round - trips in prices on march 18, 2015, in the eurodollar currency pair and on october 15, 2014, in the u. s. treasury cash and futures markets – have suggested the possibility that advancements in automated trading and changes in market structure may have improved liquidity in normal times but left markets prone to more frequent bouts of illiquidity during which price formation appears disconnected from fundamental information. structural developments and the connection to liquidity and price discovery across markets warrant further study. see also recent comments by lael brainard, member of the federal reserve board of governors. recent changes in the resilience of market liquidity. http : / / www. federalreserve. gov / newsevents / speech / brainard20150701a. htm. bis central bankers ’ speeches have resulted in damage to the integrity of the global fx market – damage that will not easily be undone. the behaviors that triggered these criminal and regulatory actions illustrate that, for many, self - interest and the lure of near - term gains were put above the preservation of the market ’ s integrity and long - term sustainability. 8 the resulting loss of the public ’ s faith and trust in this critical market comes with a cost : let ’ s recall that it is ultimately the public that stands to lose from an fx market unable to play its vital role in the global economy. the fx market is considered by many to be relatively lightly regulated, particularly in the fx spot market. regulatory treatment across jurisdictions varies. 9 regardless of who regulates in a given region, in the absence of a single centralized and comprehensive global regulator of this highly global market, collaborative efforts between the private and official sectors play an important role. these efforts help us to better understand the roots of the misconduct and the misalignment of incentives that contributed to weaknesses in trading structures and encouraged unethical and illegal activities. and they can also play an important role in elevating best practices in order to promote a sound, effective fx market going forward. in the remainder of my remarks, i ’ ll discuss three examples of such work. first, the recommendations of the financial stability board ’ s foreign exchange benchmarks group. second, the work of the various foreign exchange committees, including the new york fedsponsored foreign exchange committee ( fxc ), to provide more detailed, globally harmonized guidance through an expanded global preamble to the existing regional codes of conduct. and third, the expansion