lot of time discussing culture internally at the fed right now, so expect to hear more about it in the near future. adjusting as necessary and engaging in dialogue as firms are developing and implementing changes, such as the ones i mentioned, to meet the requirements of the enhanced prudential standards, it is important to refine the business strategy of the u. s. operations. we all know that regulation in markets is nothing new and what it requires is a better analysis by firms on the cost of doing business in different markets compared to profitability. for some firms, we see aggressive actions to adjust their geographic footprints to avoid, at least for a time, the impact of the new standards. for other firms, we see productive and realistic discussions about how to address the new standards, including how booking models and other business operations need to change. in addition, we are seeing home country supervisors engaging in discussions with firms, asking important questions about how host country rules and regulations will affect group operations and seeking to understand the knock - on effects of the new rules across the global operations. as firms are adapting both business strategies and operations to meet home country and host country rules and regulations, we are hearing about the challenges that have been identified. however, there is still a lack of specificity around these challenges, including quantifying the impact – on business, strategy, customers and staff ; identifying potential near - term mitigants ; and developing proposals on potential longer - term solutions that could be the basis of a productive dialogue. rhetoric is fine, but it ’ s not enough. we need to understand on a more concrete level how these changes are going to impact the firm, from your clients to your operations, from your business models to your culture. we have been hearing some of this, but more specific examples and solid data is needed to be in a position to address the issues. remaining issues on my insomnia list turning now to the issues that still keep me awake at night, i will highlight three of these today : ( 1 ) aml / bsa ( yet again ) ; ( 2 ) information technology ; and ( 3 ) communication and coordination. bis central bankers ’ speeches 1. aml / bsa the world of aml / bsa keeps growing. what started out decades ago as a us - centric emphasis on hindering drug trafficking has transformed into a global framework that addresses a range of criminal activity, anti - terrorism, arms proliferation, and tax avoidance. as i know

the most economically devastating periods in our history. there has been substantial effort on the part of global regulatory and supervisory bodies to address the weaknesses identified in the financial crisis. the work of the basel committee on capital and liquidity standards, as well as the work of the financial stability board ( fsb ) on cross - border resolution, are but a few examples of the hard work that global bodies have been undertaking to address the weaknesses identified through the crisis. at the same time, national authorities have been working hard both to implement the agreedupon global fixes, but also to develop and execute appropriate remedies for problems identified at the national ( or local ) level. locally, while appreciating the need to address the bis central bankers ’ speeches crisis on a global scale, many countries saw the need to be in a better position to safeguard their own. the bottom line, in fact, was : the crisis was global, but the impact was felt locally. global in life ; local in death, as the saying goes. so, while authorities have endeavored to develop and implement common global rules across a wide range of issues, many national authorities have simultaneously moved to develop and implement national standards – that may conflict with or appear at odds with a barrier - free and harmonized financial system that allows the free flow of capital and competition across the globe. national rules that require local capital and local liquidity are two examples of standards that may present challenges to the efficient and effective operations of global firms. it will be important for firms to be in a position to meet both sets of requirements. what i ’ d like to offer in my remarks today are some steps i see as necessary for institutions navigating in this new environment to begin to address the concerns i ’ ve outlined above. and, i ’ ll close with a couple of issues that remain on my “ insomnia ” list that will continue to warrant increased efforts in the coming year. what will it take for firms to navigate in this new environment? addressing the weaknesses i ’ d like to start first with a fundamental observation : we need to focus first on fixing what was so obviously broken. the new sets of rules and regulations, whether global or local, were designed to address the very weaknesses that led to bad outcomes during the financial crisis : low levels and quality of capital ; insufficient liquidity ; fundamental weaknesses in a range of risk management practices ; poor management information and reporting systems ; complex structures and systems that couldn ’ t be quickly