avoiding duplication of supervisory efforts will continue to be top priorities for the international supervisory community, especially as we adopt newer supervisory approaches, such as basel ii. finally, we need to continue to promote investments in strengthening resilience in critical infrastructure in payments and settlement systems and those institutions that play an important role in market clearance systems. this is a critical part of the supervisory and market oversight process we perform, and there is an active public - private effort underway to bring about further improvements in back - up facilities and overall resilience. the innovations that have transformed finance over the past decade have substantially improved the overall stability and resilience of the u. s. financial system. but these improvements are unlikely to have brought an end to what charles kindleberger called “ manias and panics ” in financial markets. they cannot fully insulate the financial system from the effects of large macroeconomic shocks. and they will not by themselves preclude the possibility of failure in a major financial institution or a critical piece of market infrastructure. for these reasons, it is important that those of you who run financial institutions build in a sufficient cushion against adversity. of course, the overall performance of the financial system and the degree of financial stability depends on more than just the skill of risk managers and supervisors. the unique strengths of the u. s. financial system in allocating capital to where long run returns are highest depend on the overall confidence investors have in the fairness and integrity of our financial markets. these strengths depend on our openness to competition and the opportunities and rewards to innovation that the regulatory environment provides. the stability of the financial system also depends significantly on the quality of macroeconomic policy, not only in terms of the credibility of monetary policy, but also in the degree of confidence investors have in u. s. fiscal management. the current deterioration in the u. s. fiscal position and the acute decline in the net national savings rate represent risks to the financial system and the economy as a whole. these risks are magnified by the size of the u. s. external imbalance and the unprecedented scale of financing requirements it reflects. although the present economic environment looks quite favorable, these broader macroeconomic policy challenges make it even more important that we build on the substantial progress we have already made in strengthening risk management and the resilience of critical market infrastructure. our success in meeting these challenges will help ensure that our financial system proves as resilient in the future as it has in the recent

to firm types. we have worked hard, including through the meeting varied people initiative launched in 2021 [ 3 ], to broaden individual representation on the committee, and our market intelligence network, to ensure we benefit from the widest possible range of views and input. just as the customer base has broadened, the technology used to service it has fundamentally changed. the early minutes of the fxjsc are dominated by descriptions of detailed disputes that could only arise in a voice - execution market. however sophisticated chatgpt and the like may become, i am doubtful they could ever disentangle the misunderstandings of that era! at the same time, few members of the 1970s committees could have foreseen how the market would be revolutionised by the technology to come – from the early reuters terminals via the introduction of the internet, to today ’ s world of algorithms and vast automated market - making systems marshalling petabytes of data. today ’ s market structures have the capacity to meet consumer needs in ways undreamt of decades ago. but such decentralisation, dare i say fragmentation, also poses daunting challenges for the unwary, in terms of understanding where they can find the best liquidity, and on what terms. as the market structure gets more complex, transparency has never been more important. [ 4 ] part of the answer here lies in centralised data gathering : the fxjsc itself took an early initiative in the late 1980s to develop the first london market - wide survey, later globalised via the bis. bespoke technologies, including transaction cost analysis ( tca ) tools can also help. but this is an area that will need ongoing attention if we are to reap the potential gains from technological advances of recent years. the evolving toolkit for maintaining safety, soundness and financial stability my final theme relates to how central banks should think about the relationship between fx markets and financial stability. that relationship is not one - way of course : exchange rates, particularly floating ones, can be important buffers against unanticipated shocks, allowing economies to adjust without more painful corrections in less flexible domestic prices. but fx markets can still dry up in stress periods, particularly in the presence of material imbalances in currency demand. that is why the major central banks established a permanent network of standing swap lines in the wake of the global financial crisis. those swap lines proved vital in our fight against the global ‘ dash for cash ’ following the covid lock