compete at the level that they need to – particularly with the constraints of regulation. at the end of the day, will financial firms be able to compete in the same way – or will these largely unregulated players be the future of our financial system? the final dimension i ’ m certain won ’ t surprise you – and that ’ s cybersecurity. i ’ m sure i don ’ t have to explain too much why this keeps me awake at night, but suffice it to say that as i think about the kinds of risks that might cause the next crisis, cybersecurity is the one that worries me the most. i think we ’ ve done a reasonable job in developing rules and regulations to address the causes of the last crisis, and firms are in the process of building the resilience to withstand those types of shocks. but, cyber adds an element to planning for the next crisis that goes beyond what additional capital and liquidity can provide to the system. bis central bankers ’ speeches i recognize that the topic seems daunting, but it has to be addressed soon, if you want to survive and not just comply with regulations. it is an area that will continue to warrant attention across the industry – and will require a level of coordination and collaboration between the public and private sectors to address in a meaningful way. in many respects, i think we are all in this one together. 3. enhancing coordination and communication the final area i wanted to highlight is coordination and communication. the theme of enhancing coordination among supervisory and regulatory bodies is an ongoing one that i addressed last year and one that you may hear me speak about again next year. each year, i do think we make progress, but as increased attention is placed on ensuring the effective implementation of local ( or host country ) rules and regulations, we need to ensure we don ’ t lose sight of the need to continue to work effectively across jurisdictions in supervising the largest firms. there are challenges that still exist in coordinating across multiple agencies – domestically and internationally and, at times, with competing agendas ( e. g., prudential vs. conduct ). as well, there remain some challenges to effectively sharing information, and while some legal impediments have been resolved, the seamless exchange of information is not yet the norm among key supervisors. i do believe that the trust level is building among supervisors as a result of the hard work over the past couple of years, but this will be an

based interest rate swaps and overnight index swaps. moreover, treasury futures, which have existed for several decades, have become an increasingly widely used close substitute as well. throughout this history, the treasury market has retained one of its most important attributes – its superior liquidity. however, the concept of financial market liquidity is a notoriously difficult one to define. many approaches to measuring liquidity seek to quantify the cost of transacting in a given size, and this is certainly one reasonable definition. others, however, might argue that it is the ability to transact that matters most for liquidity, even if the “ cost ” goes up during periods of heightened volatility. perhaps even more difficult than defining liquidity is answering the question of how an increasingly electronic, and often automated, market affects liquidity. as we will see, this is a particularly pertinent question when examining the events that took place in the treasury market on october 15 of last year. electronic and automated trading in the treasury market as i noted earlier, electronic trading – or the practice of executing transactions through computer systems – has become an important feature of the modern treasury market. while comprehensive data on the universe of secondary trading in the treasury market is somewhat lacking, estimates suggest that electronic trading represents a greater share of activity than transactions conducted by voice, perhaps by a substantial margin. as noted above, the vast majority of interdealer market trading is conducted electronically, but a sizable proportion of trading in the dealer - to - customer market is now executed electronically as well. automated trading is a subset of electronic trading that relies on computer algorithms for trading decisions, execution, and booking. market participants engage in automated trading for a variety of reasons, including cost savings and efficiency gains from the relatively faster although this was market practice through 1992, the federal reserve bank of new york neither encouraged nor required this use of the primary dealer list. bis central bankers ’ speeches speed at which computer algorithms can make and process certain types of decisions. for example, a dealer may decide that for orders under a certain size, it is more efficient and cost effective to have a system automatically provide a quote when a customer shows interest than to have a trader manually do so. high - frequency trading ( hft ) refers to a type of automated trading that relies primarily on speed to identify and act upon trading opportunities faster than other market participants. hft is often associated with a high volume of order messages and rapid position turnover. such trading typically