. • raw computing power was essential for the design and risk management of any proposed new settlement facility. through scenario analysis and stress testing, cls ’ s founders could determine the necessary capital and liquidity needs, default handling procedures, and the general benefits of multilateral vs. bilateral netting. the inherently multicurrency nature of foreign exchange settlement of course enhanced the challenge. • the published allsopp analysis included a challenge from the major central banks to the major market participants to develop a new settlement mechanism. in short, find a solution or we will find one for you! i recount this history to highlight the magnitude of the achievement cls represents. the establishment and growth of cls is undoubtedly one of the most significant accomplishments in global financial markets in the post - war period and a major breakthrough in managing settlement risk in an over - the - counter market. bis central bankers ’ speeches • the largest part of the achievement, of course, is the difficult job of making it happen. cls was actually the third major concept for fx settlement. it succeeded because the industry collectively got firmly behind cls and because of the hard work of the many people in the cls organization, whose commitment and efforts continue to this day. let me highlight three dimensions of cls ’ s success. first, its growth and its scope. when it went live in 2002, cls began settling fx transactions in just seven currencies with 39 settlement members. today it settles in 17 currencies with 63 settlement members and 16, 000 third party users. volumes and values of transactions settled via cls have also expanded significantly. today cls is settling average daily values of nearly u. s. $ 5 trillion and average daily volumes of 1 million transactions. on its peak settlement value day, march 19, 2008, cls settled over 10 trillion u. s. dollars equivalent. second, adaptation to a rapidly changing foreign exchange market. today ’ s fx market is very different in its pace, the composition of its participants and its size from the mid - 1990s of the allsopp report. today ’ s trading reflects more high - frequency, algorithmic trading ; a wider range of financial participants, like hedge funds ; and higher overall volumes. in response to those changes, cls worked diligently with industry and the regulatory community to launch the cls aggregation service ( clsas ), a joint venture between cls and traiana, in 2010. • the service aggregates spot fx

we are all more aware of the importance of actively looking for our blind spots. gillian tett, writer for the financial times and author of the silo effect recently visited the ny fed, and reminded us to look broadly. in her case, when trying to understand social dynamics, it is important to look not just in the middle of the dance floor, but also at the “ non - dancers ” outside of the spotlight. in our case, it is what other factors might create either idiosyncratic or systemic distress. so, with that perspective in mind, i noticed two surprising omissions from prior global risk forum agendas. the first is cybersecurity. over this time period, there has been an increasing awareness among risk professionals about the constant and present danger that cyber - threats pose to the financial sector. cyber - threats are a vital concern for the supervisors responsible for the safety and soundness of the financial system and for individual risk managers. in the u. s., the department of treasury, our intelligence agencies, financial regulators and supervisors, and risk professionals across the financial sector are working to defend against cyber - attacks and to minimize the potential disruption resulting from a successful attack. u. s. authorities are working to finalize objectives - based supervisory expectations for risk management around cyber threats. i ’ m encouraged that this year ’ s forum includes an expert panel on “ technology risks ” that will explore the cyber - threat landscape and approaches to mitigate the associated risks. a second noteworthy omission relates to a specific component of governance. while some governance topics have been remarkably stable, in my view, risks associated with business misconduct at financial institutions have not received adequate attention in these forums. through initiatives like the annual conference on “ reforming culture in the financial services industry, ” the new york fed has been challenging the financial industry to consider the many factors that have contributed to recent, widespread instances of misconduct. in concert with the industry, i believe that supervisors can help the industry improve governance, culture and behavioral outcomes through supporting the development of effective internal governance regimes, prudent risk management policies, incentives, and strong compliance and control structures, all within a framework of effective oversight from the board of directors. in today ’ s forum and in the future, i welcome other participants ’ thoughts on approaches for developing, measuring, and maintaining a strong, ethical culture within the industry. 2 / 3 bis central bankers'speeches conclusion as risk professionals, it ’ s important to be forward