be participating today - i hope we manage to play a small part in sending you down that path. 1 / 2 bis - central bankers'speeches finally, on that note, i would like to encourage everyone to reach out to others joining today. strong networks of both mentors and peers can be a lifeline. they are critical to entering and completing advanced degree programs. they help navigate the professional landscape. and they will offer both support and advice as you advance in your career. and we do hope that for some of you, that path is economics, and you will make the federal reserve a stop along the way. thank you for joining us and enjoy the day. 2 / 2 bis - central bankers'speeches

daniel k tarullo : liquidity regulation speech by mr daniel k tarullo, member of the board of governors of the federal reserve system, at the clearing house 2014 annual conference, new york city, 20 november 2014. * * * the financial turbulence of 2008 was largely defined by the dangers of runs – realized, incipient, and feared. facing deep uncertainty about the condition of counterparties and the value of assets serving as collateral, many funding markets ground to a halt, as investors refused to offer new short - term lending or even to roll over existing repos and similar extensions of credit. in the first instance, at least, this was a liquidity crisis. its fast - moving dynamic was very different from that of the savings and loan crisis or the latin american debt crisis of the 1980s. the phenomenon of runs instead recalled a more distant banking crisis – that of the 1930s. despite this defining characteristic of the last crisis, measures to regulate liquidity have byand - large lagged other regulatory reforms, for at least two reasons. first, prior to the crisis there was very little use of quantitative liquidity regulation and thus little experience on which to draw. while the basel committee got to work quickly, senior central bankers and heads of bank supervisory agencies extended the timeline for implementation of liquidity standards to guard against unanticipated, undesirable consequences from these innovative regulatory efforts. a second reason liquidity regulation has followed other reforms is that judicious liquidity regulation both complements, and is dependent upon, other important financial policies – notably capital regulation, resolution procedures, and lender - of - last - resort ( lolr ) practice. work on liquidity regulations has both built on reforms in these other areas and occasioned some consideration of the interaction among these various policies. but while perhaps a bit drawn out, the work has proceeded. a final version of a liquidity coverage ratio ( lcr ) was agreed internationally and has been adopted by regulation in the united states. 1 the basel committee ’ s recently announced final net stable funding ratio ( nsfr ) is another significant milestone in building out a program of liquidity regulation. today i would like to take stock of the progress that has been made. i will first describe the role of liquidity regulation, including how it relates to those other dimensions of regulation i mentioned a moment ago. next, i will review the specific liquidity regulatory and supervisory measures that have been put in place or are in the