than the present network of national systems was designed to support. technological advances provide us with a new set of tools to make what may seem optimal from a systemic perspective more practical. we will continue to work closely with the private sector in designing effective ways to deal with the full range of new challenges from increased financial integration and increased concentration, greater complexity, and new threats to operational security and continuity. and we will work hard, as we have in the past, to try to find the right balance between the broad objectives of stability and security and the efficiency of the system.

new tools to implement monetary policy or used traditional tools in new ways or in unprecedented size, in part because economic conditions have necessitated historically low interest rates that have bumped up against the zero bound for almost seven years. one result is that the balance sheets of central banks in many advanced countries are now much larger than the amount of currency in circulation, which raises new questions and, perhaps, challenges. 2 walter bagehot, lombard street : a description of the money market ( london : henry s. king, 1873 ). while bagehot is often remembered for his advice regarding lender - of - last - resort policy, most of his book provides a careful study of money markets, which is our current focus. central banks that maintain large foreign exchange reserves may also have balance sheets that far exceed currency in circulation. this is more typical in emerging markets, where domestic currency money markets tend to be less mature. bis central bankers ’ speeches we have also seen important changes in money markets, which we can define as wholesale markets for low - risk, highly liquid, short - term ious – including central bank liabilities, which are among the highest quality assets traded in these markets. for centuries, money markets have played a central role in financial intermediation. these are the markets in which central banks traditionally operate and from which the monetary policy impulse is transmitted. although their role hasn ’ t fundamentally changed, modern money markets look quite different today than they did during bagehot ’ s time and even just ten years ago. the pace of change has been remarkable following the financial crisis, mainly because of exceptional monetary policy measures and new regulations. changes in market structure and regulation have implications for monetary policy implementation, and today ’ s discussion provided some interesting insights on these topics. this combination of changes in money markets and new policy tools, as well as observations on how central banks ’ operating frameworks did or didn ’ t work during the financial crisis, suggests that those of us responsible for monetary policy operations should be researching and analyzing how monetary policy will be implemented in the years to come. what are the lessons from the crisis and the long period spent at the zero bound and how do these lessons change our views regarding monetary policy implementation? these are questions that many central banks are currently facing, particularly in advanced economies. they are certainly relevant for us at the federal reserve as we begin our own efforts to think about a long - run framework for monetary policy implementation. 3 in my remarks tonight, i would like to