, recovery planning is actually an even more important issue. because fmus provide critical services to the industry, experiencing a major disruption that could lead to resolution – or dissolution – is unacceptable. it is important, then, that a ccp be structured in a way, and develop and have tools available, to enable it to recover from losses and continue operations under extreme scenarios. simply put, the debate on ‘ less complex ’ for financial market utilities is much more about recovery than it is about resolution. steadfast resiliency may include casting a more critical eye on the resources needed for a single ccp to withstand a plausible, severe shock. conclusion while there is still work that needs to be done to make financial institutions more resilient, better managed and less complex, we have also made a great deal of progress. i ’ d like to close my remarks by highlighting some of the practical steps we are taking on the supervisory side to continue that progress. • first, through collaboration and communication with other supervisors, both domestic and foreign, we are continuing to work across global firms to address issues together and break down barriers to sharing information and coordinating better among supervisors. i ’ d say this is still a work in progress. bis central bankers ’ speeches • second, we need to continue to communicate our relevant supervisory findings in a timely manner and our communication needs to be candid and direct. still too often i find that we don ’ t say what we mean the first time – and this leads to confusion and, at times, bad outcomes. • lastly, we need to be more proactive in establishing an open dialogue with the directors of the financial institutions we supervise. we look to the directors to flag for us the key risks that keep them up at night. and, it is our obligation to explain the intuition behind our supervisory concerns and the rationale for needed change. thank you for your attention today. i would be happy to answer a few questions. bis central bankers ’ speeches

a complement to resiliency and necessary to achieve stronger firms and a stronger system. as i know you are well aware, there has been renewed attention on the importance of effective corporate governance across the industry. the debate includes examining the merits of familiar structures and practices of corporate governance and increasingly has focused on the corporate cultures of financial institutions. in this regard, i ’ d offer that the themes we see across the industry are fairly common. that is, both recognition of the issues and progress in addressing outstanding challenges are resident in all types of institutions, whether banks, non - banks or market utilities. to start, i ’ ll bis central bankers ’ speeches touch on two elements in particular : risk culture and roles and responsibilities of boards of directors. in november of last year, the financial stability board ( fsb ) released a framework for assessing risk culture at financial firms. the fsb ’ s consultative document is set out as guidance for supervisory interaction with firms on risk culture. it effectively outlines the basic elements – the “ must haves ” or conditions necessary – for a firm to have a strong culture. it provides guidance for supervisors ( and, in turn, for firms ) in identifying practices and behaviors that can be indicators of a firm ’ s risk culture. and, for each area, the paper provides a set of indicators that can be used to assess where the firm is on the spectrum. to highlight those areas : • not surprisingly, “ tone from the top ” is the first indicator. • accountability – that is, ownership of risk, effective escalation, and consequences. • effective challenge – including transparency and open dialogue across and between the board and senior management and senior management and staff. • and, finally, incentives – both compensation and talent development / promotion processes. supervision in this area involves an assessment of the effectiveness of a financial institution ’ s governance, including the extent to which the board and senior management demonstrate effective behaviors that contribute to good governance. this includes consideration of the behavioral dynamics of the board and senior management, such as how the “ tone at the top ” and the cultural values of a bank are communicated and put into practice, how information flows to and from the board and senior management, and how potentially serious problems are identified and addressed throughout the organization. i think the fsb ’ s document sets out a good set of reference points for supervisors – and for firms – to explore in evaluating risk culture. as has been noted by others – and is emphasized in the fsb ’