they may not be paying close enough attention to the aggregation of their exposures or concentrations that arise in the resulting portfolios of business. also, rapid growth can place considerable pressure on an organization's management information systems, change - management controls, strategic planning, credit concentrations, and asset / liability management, among other areas. many of the companies that have attracted public attention in recent years due to serious breaks in controls failed to focus on process changes and critical investments in their risk management and control systems that were needed to successfully support their business plans. an organization must also understand how its various business components dynamically interact. a successful enterprise - wide risk management process can help to meet many of these challenges. at the same time, it is clear that risk management practices need to be applied in a manner appropriate to the size and complexity of the organization. while the leading - edge risk - management practices used at the largest, most complex banks may have some applicability at smaller, less complex banks, data and cost limitations require greater use of more generalized models and the use of outsourcing to supplement the knowledge base of the institution. and as most of you know, running a smaller or less complex bank presents different types of challenges and requires a risk - management framework appropriately tailored to the institution. for example, transactions may be conducted more on a relationship basis and may be less data - intensive. in such a case, bank management needs to develop risk - management tools that allow it to ensure that risks are still being appropriately addressed. further, smaller organizations often face a challenge of ensuring independent review of processes and decisions since officers and staff often have multiple responsibilities that can present conflicts of interest. many of you are probably familiar with the enterprise risk management framework published over a year ago by the committee of sponsoring organizations of the treadway commission, or coso. the coso framework provides a useful way to look at enterprise risk management. notably, the coso framework states explicitly that, while its components will not function identically in every entity, its principles should apply to institutions of all sizes. small and mid - size entities, for example, may choose to apply the framework on a less - formal and less - structured basis and scale it to their own needs - - as long as quality is maintained. this underscores the message from bank supervisors that good risk management is expected of every institution, regardless of size or sophistication. naturally, some tension will still exist between what supervisors expect and how bankers

jerome h powell : confirmation hearing testimony by mr jerome h powell, member of the board of governors of the federal reserve system, before the committee on banking, housing, and urban affairs, us senate, washington dc, 28 november 2017. * * * chairman crapo, ranking member brown, and other members of the committee, thank you for expeditiously scheduling this hearing and providing me the opportunity to appear before you today. i would also like to express my gratitude to president trump for the confidence he has shown by nominating me to serve as chairman of the board of governors of the federal reserve system. the federal reserve has had a productive relationship with this committee over the years, and, if you and your colleagues see fit to confirm me, i look forward to working closely with you in the years ahead. before i continue, i would like to introduce my wife, elissa, who is sitting behind me. i would not be here today without her unstinting love, support, and wise counsel. as you know, i have served as a member of the board of governors and the federal open market committee ( fomc ) for more than five years, contributing in a variety of capacities, including most recently as chairman of the board ’ s committee on supervision and regulation. my views on a wide range of monetary policy and regulatory issues are on the public record in speeches and testimonies during my service at the fed. the congress established the federal reserve more than a century ago to provide a safer and more flexible monetary and financial system. and, almost exactly 40 years ago, it assigned us monetary policy goals : maximum employment, meaning people who want to work either have a job or are likely to find one fairly quickly ; and price stability, meaning inflation is low and stable enough that it need not figure into households ’ and businesses ’ economic decisions. i have had the great privilege of serving under chairman bernanke and chair yellen, and, like them, i will do everything in my power to achieve those goals while preserving the federal reserve ’ s independent and nonpartisan status that is so vital to their pursuit. in our democracy, transparency and accountability must accompany that independence. we are transparent and accountable in many ways. among them, we affirm our numerical inflation objective annually and publish our economic and interest rate projections quarterly. and, since 2011, the chairman has conducted regular news conferences to explain the fomc ’ s thinking. additionally, we are accountable to the people ’