contributed significantly to the council ’ s recent studies – one on the volcker rule ’ s restrictions on banking entities ’ proprietary trading and private fund activities and a second one on the act ’ s financial - sector concentration limit. and we are now developing for public comment the necessary rules to implement these important restrictions and limits. last week, the board adopted a final rule to ensure that activities prohibited by the volcker rule are divested or terminated in the time period required by the act. we also have been moving forward rapidly in other areas. last fall, we issued a study on the potential effect of the act ’ s credit risk retention requirements on securitization markets, as well as an advance notice of proposed rulemaking on the use of credit ratings in the regulations of the federal banking agencies. in addition, in december, the board and the other federal banking agencies requested comment on a proposed rule that would implement the capital floors required by the collins amendment. in december, we also requested comment on proposed rules that would establish standards for debit card interchange fees and implement the act ’ s prohibition on network exclusivity arrangements and routing restrictions. in january, the board, together with the office of the comptroller of the currency, federal deposit insurance corporation, and office of thrift supervision ( ots ), bis central bankers ’ speeches provided the congress a comprehensive report on the agencies ’ progress and plans relating to the transfer of the supervisory authority of the ots for thrifts and thrift holding companies. in addition, as provided by the act, we and the federal reserve banks each established offices to consolidate and build on our existing equal opportunity programs to promote diversity in management, employment, and business activities. we continue to work closely and cooperatively with other agencies to develop joint rules to implement the credit risk retention requirements for securitizations, resolution plans ( or " living wills " ) for large bank holding companies and council - designated nonbank firms, and capital and margin requirements for swap dealers and major swap participants. we are consulting with the securities and exchange commission ( sec ) and the commodity futures trading commission ( cftc ) on a variety of rules to enhance the safety and efficiency of the derivatives markets, including rules that would require most standardized derivatives to be centrally traded and cleared, require the registration and prudential regulation of swap dealers and major swap participants, and improve the transparency and reporting of derivatives transactions. we also are coordinating with the sec and the cftc on the

nominal exchange rates allow their national price levels to adjust over time. but sterilization operations and other policy tools can, and often have, restrained such adjustment. meanwhile, countries with current account deficits should take steps to increase national saving, including by putting in place credible plans to reduce their fiscal deficits in the longer run. the international monetary system, in effect, still suffers from the same asymmetry that bedeviled the bretton woods system – namely, a marked differential in the pressures facing surplus and deficit countries to permit automatic adjustments or to undertake policy to reduce persistent global imbalances. surplus countries can resist adjustment by restricting capital flows and exchange rate movements, but deficit countries are forced to adjust when they run out of international reserves or lose access to external borrowing. this asymmetry has served to inhibit the global rebalancing process, and it could threaten the ongoing recovery : if deficit countries curtail spending without offsetting spending increases in the surplus countries, aggregate demand would decline, with adverse consequences for the global economy. thus, in my view, we need to continue working toward an international monetary system characterized by more - flexible exchange rates, open capital accounts, and independent monetary policies that will facilitate the adjustment of global imbalances. but we must recognize that countries face diverse challenges in such a transition. for countries with undervalued currencies, the adoption of more - flexible exchange rates requires an internal shift in resources across sectors – a transition that takes time. as noted earlier, the recent crisis has also uncovered numerous flaws in the functioning of regulation of our financial system, and these, too, will take time to correct. finally, although i have not addressed this concern in my remarks today, the expansion of public - sector deficits and debts in many countries poses very serious medium - to long - run risks for both the international monetary and financial systems that will need to be addressed. against the background of these longer - term issues, we must also support countries ’ efforts to address their more immediate challenges. some advanced economies struggle with weak demand, high unemployment, and disinflation. many emerging market economies face increasing inflationary pressures and capital inflows amid strong growth. in light of these differing challenges, a cooperative spirit among policymakers is essential to ensure prosperity of the global economy. bis central bankers ’ speeches