jerome h powell : the evolving structure of us treasury markets speech by mr jerome h powell, member of the board of governors of the federal reserve system, at the federal reserve bank of new york, new york city, ( via prerecorded video ), 20 october 2015. * * * i am pleased to be here with this distinguished group of market participants, academics, government officials, and many others who are vitally interested in the issues before us today. 1 i am sure that all of us recognize the importance of the u. s. treasury markets to our economy and our financial system ; indeed, to the world economy and the global financial system. as bill just outlined, for the next two days, we will collectively address the most important questions facing the treasury markets today. 2 are there significant problems in these markets that are not likely to self - correct? more specifically, is liquidity in broad decline, or more prone to sudden disappearance? if so, what are the causes? and what are the costs and benefits of potential market - led or regulatory responses? the design of this conference is to provide a forum for differing perspectives on these issues. it has been one year since the events of october 15, 2014. appropriately, the conference will begin with a review of the findings of the recent joint staff report issued by the u. s. department of treasury, the board of governors, the federal reserve bank of new york, the securities and exchange commission, and the commodity futures trading commission. 3 the report analyzes in depth the unprecedented events and market conditions that day. it also shows clearly how dramatically the structure of treasury markets has changed in recent years. new participants and new technologies have taken prominent roles in these markets, and longtime market participants have adopted new business models. today ’ s discussions will reflect this altered landscape, with panels on automated trading, market making, and the impacts that changes in treasury markets have had on liquidity and on end users. my discussions with market participants and regulatory colleagues suggest a range of opinions about treasury market liquidity. while most market participants perceive some reduction in liquidity, views on the severity of the situation seem to be more mixed. some measures such as trade size and market depth have declined, and investors today have to employ increasingly sophisticated strategies to execute larger trades at a good price. some other measures show no decline in overall market liquidity. however, we need to consider not just the average level of liquidity under normal trading conditions, but also

##s should already be seeking to integrate climate risk into their enterprise risk management frameworks, the iais believes further guidance and support would enhance supervisory effectiveness and help inform appropriate regulatory requirements. we can no longer ignore the impact of climate change ; the impact of climate - related events has become palpable over the last few years, both globally and domestically. kwazulu - natal floods severe flooding and landslides caused by heavy rainfall in april 2022, left thousands of south africans destitute and impacted a number of businesses. this was the second occurrence of floods in the region in this year, after heavy rainfalls battered the province in january 2022. the non - life insurance sector was able to step in and mobilise quickly to support people and communities in affected areas. however, the economic losses were significantly more than the insured losses, which highlights the high level of uninsured or under - insured people and businesses in south africa. lastly, let me turn to cyber - risk in the non - life insurance sector and the work that the prudential authority and the international association of insurance supervisorsare doing to ensure that the insurance sector is addressing this matter : operational and information technology risk ( including cyber - risk ) the interconnectedness of the financial ecosystem and the exponential rise of cyberthreats have attracted the attention from both the financial sector and the pa to address these risks. as insurers start to digitalise underwriting, creating insurance ecosystems, claims and administrative processes, we observed a proliferation of cyber events. the pa is in the process of developing and enhancing various regulatory and supervisory practices. some initiatives that have been undertaken over the past year include : • a cybersecurity and cyber - resilience standard that was issued for public consultation in december 2021 ; • prudential cyber meetings with supervised entities and other supervisory interventions which aim to strengthen the work on cyber - risk ; and • a cyber - risk underwriting thematic review. the iais is using its vantage point as an international standard - setter to assess the risks to the sector and develope material to support supervisors with regard to risks associated with it third - party outsourcing, and insurance sector cyber - resilience more broadly. the pa will also participate in this work and will consider it in the development of its own supervisory and regulatory tools. conclusion it is clear that, as we emerge from the covid - 19 crisis, there remains uncertainty and challenges ahead. in order for you