just be viewed as a mandatory or regulatory requirement. if nurtured it has the ability to transform the payments ecosystem. through unearthing the full potential of iso 20022 we can reap the greatest benefits. i would like to leave you with a quote by meister eckhart, a 14th century german theologian, " what we plant in the soil of contemplation, we shall reap in the harvest of action. " i would like to thank elizabeth leather, james southgate, tanveer bhatti, mark streather and brendan hogarth for their help in preparing these remarks. 1 bank of england ( 2023 ) roadmap for the real - time gross settlement service beyond 2024 2 financial stability board ( 2023 ) g20 roadmap for enhancing cross - border payments : consolidated progress report for 2023opens in a new window 3 bank of england ( 2021 ) property sector market guidanceopens in a new window 4 bank for international settlements : committee on payments and market infrastructure ( 2023 ) harmonised iso 20022 data requirements for enhancing cross - border payments – final reportopens in a new window 5 / 5 bis - central bankers'speeches

. operating risk, legal risk, and reputational risk round out a conventional list of risks for banks. operating risk, in particular, has attracted more attention in recent years, partly because improvements in technology and data storage permit institutions to retain and analyze more data and also because the increased volume and complexity of bank transactions have, arguably, increased this risk for many banks. roughly defined, operating risk refers to the risk arising from inadequate information systems, operational problems, breaches in internal controls, fraud, or unforeseen catastrophes that can result in unexpected losses. the term may also embrace legal risk, because many legal claims arise from operational failures. the need to manage and control operating risk is particularly great at institutions whose activities involve substantial interbank payments, securities settlements, asset management, or other transactions that are high volume and entail large dollar amounts. these conditions not only expose those particular institutions to substantial risk but also have the potential to disrupt financial markets worldwide. events of september 11 illustrate that point. risk - focused supervision and bank risk management culture in its supervisory efforts, the federal reserve has for much of the past decade emphasized a risk - focused approach, particularly in the case of large institutions. that approach requires examiners to understand an institution's risk profile and to devote resources to areas presenting the greatest risk. it allows examiners greater flexibility in their oversight activities, focuses attention on an institution's internal processes, and contrasts with the more traditional approach that was based on reviewing and evaluating individual transactions. the sheer volume of bank transactions today and the speed with which individual exposures can change have required us to take that approach. we need to be confident that an institution's internal systems, procedures, and controls are sound and that they will remain effective long after our review. of course, evaluating procedures and controls requires some transactions testing. risk - focused supervision and the nature of banking today require successful organizations to maintain sound corporate governance and strong systems of controls. banks must manage customer and counterparty relationships with an appropriate sensitivity for risk. lending officers and risk managers must understand the changes in their customers'business plans that might have implications for creditworthiness. they must not be blinded by the reputations of their counterparties but rather use all the fragmented data, both proprietary and market - based, to shed light on their customers'prospects. finally, exposure limits should be sufficiently robust to consider both capital at risk and cash out the door. still other practices, such as diversifying risks and not