##coming, but given our position in the global financial system, we especially should have done better. we ’ ve taken important steps reflecting both new legislative mandates and a broader effort to rethink our regulatory and supervisory framework. in particular, systemically important banking organizations must now hold amounts of capital and liquidity that are better aligned with their risk profiles, compensation schemes for these institutions will be more focused on rewarding long - term results and the official sector is making progress in solving the “ too - big - to - fail ” dilemma. all of this remains very much a work in progress. but, these efforts should help us to avoid repeating the mistakes of the recent past, and to take a more proactive stance toward mitigating potential future vulnerabilities. of course, we at the fed are not alone here. since the recent financial crisis, central banks worldwide have been engaged in a broad rethinking of how to better fulfill their mandates. let me close with a final thought. the largest problems that countries create for others often emanate from getting policy wrong domestically. recession or instability at home is often quickly exported. equally important, growth and stability abroad makes all our jobs easier. this means that there are externalities in the work we do, so that more effective fulfillment of our domestic mandates helps to bring us to a better place collectively. ensuring global growth and stability is and will remain our joint and common endeavor. bis central bankers ’ speeches

also concentrate the remaining risk. that is, ccps create potential single points of failure in global derivatives markets. thus, ccps need adequate capacity to absorb potential losses from the default of one or more of its members, and they need to have access to liquidity so that they can always fully settle their obligations. the new risk management standards include requirements that ccps have pre - funded default arrangements, that ccps measure and collect initial and variation margin even in extreme stress scenarios, and that ccps be able to withstand, again in a plausible stress scenario, the failure of a member having the largest exposure to the ccp. in some cases, this last element is enhanced to require the ability to withstand the failure of the two largest members. as these standards are fairly new for the global population of financial market utilities and in many jurisdictions the standards have yet to be issued in new rules and regulations, progress across the industry in meeting these standards is mixed. • in some cases, liquidity risk management frameworks are underdeveloped, with needed additional focus on measurement and monitoring to make the frameworks more robust. • additional work is also needed on the concept of liquidity buffers, with some firms continuing to rely too much on uncommitted sources of liquidity. • and stress testing and scenario planning remain areas of continued focus, with challenges in designing scenarios that are sufficiently extreme. beyond liquidity, additional work is needed in the area of capital planning. while this is not an area that financial market utilities have spent considerable time and resources on in the past, it is an area we will continue to focus on in our reviews and expect continued development and improvement over the coming year. as the industry continues to build resilience to future shocks, by enhancing the management of and the amount of capital and liquidity, as two important elements of resilience, the financial system will continue to grow stronger. it ’ s essential, though, that all parts of the financial system – banks, non - bank financial firms, market utilities – achieve enhanced resilience. simply having one part of the system robust to future shocks, with other parts – connected and linked within the system – less robust, leaves the system vulnerable to future shocks and instability. management i ’ d like to turn now to the second element of our supervisory framework : management. in addition to our focus on resiliency as an essential element in strengthening the financial system, we see enhanced risk management and corporate governance as