falling behind the curve in the near future appears limited, and gradual increases in the federal funds rate will likely be sufficient to get to a neutral policy stance over the next few years. 2 / 3 bis central bankers'speeches of course, the economic outlook is inherently uncertain, and, as always, the appropriate path for the federal funds rate will change in response to changes to the outlook and associated risks. thank you. i would be pleased to answer your questions. 3 / 3 bis central bankers'speeches

multi - level marketing ( mlm ) companies to defraud common people of their hard earned money is another critical challenge that financial sector supervisors are facing in various jurisdictions, including in india. it results in a loss of confidence of customers in the formal financial system and could have severe adverse implications, particularly at a time when we are putting all our energies into bringing the marginalized groups within the fold of the banking system. bis central bankers ’ speeches 13. all these developments will present significant challenges for the banking system and banks will need to face them head - on in the coming years. to gear up to these challenges, banks will need to look inwards – at their human resource management, their information systems and the technology at their disposal. importantly, they will need to look into the efficiency with which they perform their functions – that of credit intermediation and the allocation of funds to the most productive sectors of the economy. these will be the key internal drivers of change if banks are to gear up to the emerging regulatory and external environment and move into the next orbit. let me now dwell on some of the major issues in a greater detail. risk management 14. the risk management challenge for banks has been steadily growing over the last two to three decades. this can be attributed to several developments in the financial sector over the last couple of decades. first, the deregulation of financial markets led to increased volatility placing greater demands on banks to manage their risks. second, banking activities diversified from the traditional function of lending and borrowing to a larger set of activities including, inter alia, custodial services, securities underwriting and corporate advisory. third, complex global financial institutions emerged leading to growing inter - connectedness of the financial system. fourth, the role of securities and derivative products in banking expanded with increasing growth of complex financial products. the recent financial crises have further reemphasized the importance of risk management frameworks for banks. 15. the question for the indian banking sector is to what extent the risk management framework in banks are oriented towards identifying risks and tracking the passage and path of risks so as to be able to price the risks appropriately. my own view is that we in india are still at a rudimentary stage and hence, the banking system needs to urgently work on upgrading its risk identification, management and pricing abilities. 16. an associated issue arising in this context is the growing importance of stress testing. stress tests, typically, assess the resilience of banks