want to underscore some encouraging progress in improving data collection to enhance visibility into hedge fund activities. 7 in addition to their ongoing work on emerging risks, the financial stability oversight council ( fsoc ), the office of financial research ( ofr ), and individual fsoc agencies should continue to work together to ensure regulators have appropriate information to assess the financial stability risks posed by nonbank activities and their interconnectedness with banks. in conclusion, the financial system is substantially more resilient than it was in the mid - 2000s. however, vulnerabilities have risen somewhat in recent years, as highlighted by fragilities at nbfis, in the treasury market, and — most notably this year — at some banks. our framework and assessment of financial stability vulnerabilities help us understand these issues, but i am cognizant of the limitations. we cannot — and do not expect to — foresee all potential risks. the financial system is too complex and evolves too rapidly for that to be possible. what we can do is remain vigilant to emerging vulnerabilities and build resilience to a variety of potential shocks. i think it is particularly important to enhance resilience at large banks, and i support seeking public comment on federal banking agencies ’ basel iii endgame proposal on bank capital requirements. i will also focus on monitoring vulnerabilities at nbfis and the functioning of treasury markets. i strongly support continued efforts across the regulatory agencies to share more information and to boost resilience of the entire financial system. for example, the sec ’ s improved form pf reporting and the ofr ’ s bilateral repo data collection. - 10 looking forward, an area that i think deserves more attention is the financial stability implications of artificial intelligence ( ai ), especially its applications in financial services. i can imagine many of you, especially graduate students, are using or exploring the use of machine learning and other forms of ai in your research in economics. on the one hand, ai innovations could expand credit access for consumers and small businesses and bring greater efficiency to broader financial markets. on the other hand, the potential widespread adoption of powerful new ai, especially generative - ai applications, inevitably raises questions about potential benefits and risks to the stability of the financial system as a whole. academics, regulators, and financial market participants are all looking carefully at ai, and more research is welcome as we move ahead in exploring the policy and regulatory

evidence in favor of efficiency gains is weak. the study also found that the effects of consolidation on competition and credit flows are very case - specific and depend on the nature of markets for specific products and services. as i noted, this study was commissioned by finance ministers and central bank governors, so we investigated the implications of consolidation for central bank policies. the study found that financial consolidation has not significantly affected either the conduct or the effectiveness of monetary policy. however, it also suggests that central banks should remain alert to the implications of future consolidation - induced reductions in the competitiveness of the markets most important for monetary policy implementation. similarly, central banks ought to monitor potential future changes in the transmission mechanisms for monetary policy. importantly, the study also concluded that existing policies appear adequate to address individual firm and systemic risks now and in the intermediate term. however, going forward, the study identifies a number of areas that deserve careful attention by policymakers. for example, enhanced contingency planning could reduce the risks to individual firms and the broader financial system, should a large and complex financial institution become seriously distressed. because no institution is too big to fail, i believe that regulators should develop a clearer understanding of several key factors. these factors include the administration of bankruptcy laws and conventions across borders ; the coordination of supervisory policies within and across borders ; the treatment of over - the - counter derivatives, foreign exchange, and other " market " activities in distress situations ; the roles and responsibilities of managers and boards of directors ; and the administration of the lender - of - last - resort function. our study helped to clarify the need for international attention to contingency planning. in general, both crisis prevention and crisis management could be improved by additional communication and cooperation among central banks, finance ministries, and other financial supervisors, both domestically and internationally. consolidation in the us against this international background, i would like to look at what has been occurring in the united states. in the u. s., more than 4, 000 commercial banking and thrift organizations were acquired between 1990 and 2000. the pace of merger activity generally increased between 1990 and 1998, peaking at more than 500 deals in 1998. in 1999 and 2000, the number of mergers and acquisitions returned to the levels experienced at the start of the decade. partly offsetting this trend, more than 1, 400 charters for new banks and thrifts were issued during the 1990s. 1998 was also the standout year in terms of transaction size. deals completed in that year accounted