) and the international association of insurance supervisors ( known as iais ). the purpose of the institute is to provide training to senior supervisors and other supervisory staff in the application of basic supervisory principles to their national supervisory systems. the job of senior supervisors in the emerging markets is an immensely challenging one, requiring negotiation, management and leadership skills, in addition to technical supervisory skills. the institute, by bringing together key policy - making officials in central banks and supervisory agencies through high - level seminars, serves the dual purpose of sharing expertise and developing and deepening the relationships among supervisors globally. the institute will hold courses not only in basle, but on a regional basis as well. the institute will act as a clearing house for the coordination and provision of technical assistance by central banks and supervisory bodies. we also must work closely with the imf and the world bank. these institutions put people in virtually all of the world ’ s countries to evaluate candidly the macroeconomic and financial climate and supervisory policies and practices. in an important development for the furtherance of the core principles, the imf and world bank are using the core principles as the benchmark for evaluating supervisory regimes around the world. this is an effort that the basle committee plans to support not only through continued work on the core principles and the compendium, but by providing expertise and supervisory resources to supplement and advise imf and world bank staff. the members of the basle committee in many cases have the staff with the deep expertise to help emerging markets supervisors with the application of the principles in their national context and in light of various obstacles. the imf and world bank have expressed their desire to bring more of that expertise to bear in their efforts, and we have begun discussions on how to accomplish that most effectively. in addition, we believe that first - hand observation of the practical issues in implementation will suggest what further elaboration and precision would be most useful to the core principles, and what additional research and papers, programs by the institute for financial stability or specific technical assistance could supplement them. our goal is to keep the core principles relevant, incisive and implemented by supervisors globally. in addition, we in the broader financial supervisory community must set thoughtful goals for ourselves as we manage our individual agendas. the problems that have beset many countries in asia, russia and other regions and countries are not confined to the banking sector, although that may be the largest part of the financial sector. together with iosco and the iais,

a function of regulatory pressure, or capital demands, or an evolving economy, or compliance challenges, or the proliferation of new technologies, or an unprecedented season of payments innovation, or the challenging competitive landscape. all of these may represent very real risks, and no doubt occupy your consciousness, to borrow the lyrics of a prior generation, “ eight days a week ”. rather, building upon the theme of your prior panel discussion, the risk that dominates from my parochial view is the escalating and evolving cyber threat to our financial and payment systems, representing the challenge of our generation. the orientation that i want to pursue, reflecting this audience, is not what we are doing within the federal reserve to harden our critical infrastructure. while that is a manic and consuming preoccupation it is not my focus today. instead, i want to concentrate on endpoint security vulnerabilities to the payments system, in which partnership with the institutions in this room represents an indispensable element of success. historically, market infrastructures have operated on the presumption that endpoint security is 1 / 4 bis central bankers'speeches principally the responsibility of the endpoint, and infrastructure security is principally the responsibility of the operator. in the united states, the legal framework for wholesale funds transfers codifies that presumption, with each actor assigned responsibility for that part of security most within its control. yet, in the present environment endpoint security breaches can have serious implications for public confidence in the integrity of the network as a whole, even in circumstances when the operator ’ s infrastructure, applications, and security perimeter have not been compromised. a series of recent high profile events have underscored dramatically this endpoint security risk, a theme that has also captured the attention of global policy makers. as operator of a payment system in which a fedwire funds transfer is immediate, final, and irrevocable, and for which a single transfer can be affected for a penny shy of $ 10 billion, the federal reserve banks recognize that the stakes for public confidence are incomprehensibly large ; as users of said payment system, you realize the stakes for endpoints in terms of reputational risk and financial viability are equally profound. our fates in this domain are inextricably linked. work to mitigate endpoint security risks in support of our collective interest proceeds across multiple fronts, including efforts to enhance end - to - end understanding of the security relationships within a network ; initiatives to enhance assurance