##making process help inform and influence proposals that are under consideration. if there is a desire to influence change, stakeholders must engage and provide input during this process. second, the large number of finalized, proposed, and potential changes suggest a lack of prioritization - whether we have effectively identified actual risks to the banking system and devoted resources to the most pressing of these issues. prioritization is something i have spoken about at length in the past, and it remains just as critical today. 2 the banking stress last spring revealed the presence of flaws and shortcomings in our bank regulatory and supervisory framework. a lack of prioritization in our approach risks losing focus on making substantively responsive adjustments and reforms. opportunities for engagement reviewing and commenting on regulatory proposals should never be a distraction from a banker's core responsibility to ensure the bank continues serving its customers in a safe and sound manner, and in compliance with applicable laws. so, i do not want any of you to take my remarks today as a call to drop everything you are doing and open up the federal register and start reading. the banking system is a highly regulated environment, and as you see in your work every day, requires banks to devote significant resources to compliance. a strong culture of compliance can help keep your bank safe, and in the aggregate promotes a safe and sound banking system. within a bank, virtually everyone has a role to play in promoting that culture of compliance with applicable law, all while serving your customers. 3 / 9 bis - central bankers'speeches but stakeholders, including bankers, have an important role in the stewardship of the banking system that goes beyond compliance - namely, participating in the administrative rulemaking process. it is critical that you share your views with policymakers on regulatory reform proposals. all the comments, data, and analysis from commenters enable policymakers to make informed decisions throughout the rulemaking process, from the initial brainstorming stage, through the creation of a proposal, and in crafting a final rule. this feedback is equally critical in understanding how the supervisory process is working as it evolves over time and incorporates new standards and expectations. information about the intended and unintended impacts of reform initiatives is especially informative. often, private - sector stakeholders are best positioned to understand and explain these impacts, and to identify gaps in the context, data, and analysis underpinning these initiatives. i recognize that in some instances, multiple, interrelated proposals out for comment at the same time compl

do not represent core banking risks will only serve to further distract bank management and supervisors. in addition to issuing interagency supervisory guidance to banks on managing climaterelated financial risks, the board recently issued the results of a pilot climate scenario analysis, which was designed to learn about large banks'climate risk - management practices. 7 this report goes into significant detail on the technical aspects of the scenario analysis and underlying results. while exploring even remote risks can help build resiliency for the future, i think the report itself included some acknowledgment that these exercises may have limited utility in the short - term for managing risk. for example, the report acknowledges that participants " suggested that climate - related risks are highly uncertain and challenging to measure, " and that " [ t ] he uncertainty around the timing and magnitude of climaterelated risks made it difficult... to determine how best to incorporate these risks into [ banks'] risk - management frameworks on a business - as - usual basis. " 8 participants also noted that scenario design choices, assumptions, data challenges, and modelling challenges all played a material role in the analysis. 7 / 9 bis - central bankers'speeches banks already have ongoing obligations to manage all material risks, and while scenario analysis generally is not intended to be predictive, i think the uncertainty and unreliability of the results from this exercise suggest that resources may be better devoted to dealing with more tangible and immediate financial risks. we should rightly be concerned about regulatory pressure on a single issue that could lead to the misallocation of risk - management resources away from risks that may be more material, such as interest rate, liquidity, and cyber risks. closing thoughts we continue to be at an inflection point in the bank regulatory reform agenda. the pending proposals, including the basel iii capital proposal, the g - sib surcharge, new long - term debt requirements, amended resolution plan guidance, contemplated changes to the regulatory approval of merger and acquisition activity, and revisions to the interchange fee cap will have a lasting impact on banks of all sizes and their current and future customers. my hope is that you and other interested stakeholders play an active role in this process by sharing your views and concerns with regulators. this input provides valuable insights into the specific impacts - intended and unintended - of changes to the bank regulatory framework. voicing your concerns enables us to identify, and where needed, address, the real - world consequences of regulatory and