, october 2017, bis working paper # 666. 8 a counterargument is that economies of scale and network effects from technology platforms could lead to greater specialization, e. g., payments or mortgage lending. 9 see “ covar, ” tobias adrian and marcus brunnermeier, american economic review, vol. 106 ( 7 ), 1705 – 41 and “ the fundamental principles of financial regulation, ” markus brunnermeier, andrew crockett, charles goodhart, avinash d. persaud, and hyun shin, in geneva reports on the world economy, 2009 for a broad discussion and empirical evidence on ‘ systemic as a herd ’ : the case of japanese regional banks, naohisa hirakata, yosuke kido, and jie liang thum, january 2017, for an empirical example. the literature typically focused on small firms acting in the same way, but the same principle likely applies to large firms that behave similarly to amplify systemic risk. 5 / 5 bis central bankers'speeches

and risks. it is not enough to look at individual business lines or products, but we should continue to focus on enterprise risk management that reflects each business and the interdependencies among them. moreover, supervisors should be dynamic and continue to evolve as the supervised firms do. finally, supervisors should continue to develop an industrywide, macroprudential perspective to understand the impact of the continuing evolution of the u. s. financial industry. to do this, supervisors need to continue to leverage our cross - firm, horizontal perspective to better understand how the industry is evolving and what it might mean for our objectives around safety and soundness of individual firms and the efficient provision of financial services for the economy as whole. 1 i would like to thank nicola cetorelli, bev hirtle, michael holscher, anna kovner, paul licari, jackie mccormack, siobhan sanders, joao santos, katherine tilghmanhill, and james vickery for helpful discussions and analytical work. 2 see getting it right : factors for tailoring supervision and regulation of large financial institutions, randal k. quarles, july 18, 2018. 3 see lessons from the financial crisis, william c. dudley, november 6, 2017, for reviews from a regulatory perspective ; early observations on improving the effectiveness of post - crisis regulation, randal k. quarles, january 19, 2018. federal reserve board, consolidated supervision framework for large financial institutions, december 17, 2012. 5 the latest ccar results can be found at www. federalreserve. gov / supervisionreg / ccar. htm. see dong choi, michael r. holcomb, and donald p. morgan, bank leverage limits and regulatory arbitrage : new evidence on a recurring question, federal reserve bank of new york staff report # 856 for evidence of risks - shifting in response to the imposition of the supplementary leverage ratio in the u. s. 7 see andrew g. haldane, “ multi - polar regulation, ” international journal of central banking, june 2015, 11 ( 3 ), 385 – 401 ; “ strengthening and streamlining bank capital regulation, ” robin greenwood, sam hanson, jeremy stein, and adi sunderam, brookings papers on economic activity, 479 – 565, fall 2017 ; “ bank capital allocation under multiple constraints, ” tirupam goel, ulf lewrick, and nikola tarashev