financial system. and we do this by relying on the powers of reason, logic, cooperation and data. in other words, by following the brothers von humboldt, friedrich von schiller, and johan wolfgang von goethe in sapere aude. so how do we go about that? 1 / 6 bis - central bankers'speeches to increase the resilience of the global financial system and to enhance financial stability, we rely on the fsb's financial stability surveillance framework. let me start by walking you through this framework, and then i will illustrate how we apply it. the fsb's financial stability framework is based on four guiding principles. first, we need to identify the vulnerabilities that may threaten global financial stability. i say'vulnerabilities'instead of'shocks'or'risks '. that is intentional. the pandemic is a shock. the war in ukraine is a shock. a rapid shift in financial market conditions would be a shock. shocks are by definition unpredictable – so they don't offer a solid starting point for financial stability policy. risk – that is the risk of a shock large enough to have a financial stability impact – is similarly very difficult to assess. vulnerabilities, on the other hand, can usually be measured, at least to a certain extent. think for instance about the build - up of imbalances, like a rise in leverage during a credit boom. and so, they do offer a starting point for financial stability policy – policy that is aimed at reducing these vulnerabilities. through this approach we can mitigate potential systemic disruption, once a shock hits our global, highly interconnected financial system. and so, in the spirit of alexander von humboldt, who measured and mapped large parts of the world, we, in turn, try to map and measure global vulnerabilities – rather than the shocks that may or may not materialise. second, once mapped and measured, we monitor these vulnerabilities, taking into account the potential interactions between them. we also deploy a forward - looking perspective, by considering emerging vulnerabilities in addition to current ones. it is better to prevent vulnerabilities from growing in the first place, rather than having to reduce them once they already pose a global threat. our third guiding principle is that we recognise the differences among countries. the fsb's membership reflects the diversity of our global financial system, with members from both emerging market and

years : for instance, the'dash for cash'episode during the onset of the pandemic, the strains in commodity markets last year, and more recently the challenges faced by uk pension funds. thankfully, these strains have proved temporary, but only after massive official sector interventions were deployed. these examples therefore serve as a warning to remain vigilant on the recurring themes of leverage, including hidden leverage, liquidity mismatches, and data gaps. the fsb's nbfi work programme and policy proposals aim to address these vulnerabilities. in 2023, we will continue to focus on some key vulnerabilities within the sector. apart from monitoring systemic risk in nbfi, we will review the effectiveness of our money market funds policy proposals from 2021 ; revise our recommendations from 2017 on liquidity mismatches in open - ended funds ; and conduct follow - up work on margining practices and hidden leverage in nbfi. a second structural shift we have witnessed, is the digitalisation of finance. this comes in many shapes and forms, but i will focus on the rapidly developing crypto - asset ecosystem. crypto - asset markets and activities bear a multitude of risks and vulnerabilities. while the technology behind crypto - assets is often being promoted as game - changing, the vulnerabilities associated with them are in fact quite similar to those we know from traditional finance. liquidity mismatches, hidden leverage, and counterparty credit risk are all examples of well - known financial risks that have also materialised in crypto - asset markets in the past year. national regulatory authorities have recognized that these activities are in essence financial activities and have begun regulating them. this is challenging for national authorities, however, because crypto - asset markets are inherently global in reach. so, in the presence of structural vulnerabilities and in the absence of globally consistent regulation, the fsb is concerned crypto - asset markets may soon pose a challenge to global financial stability. 4 / 6 bis - central bankers'speeches the fsb therefore concluded that crypto - asset activities and markets must be subject to effective regulation and oversight commensurate to the risks they pose, both at the domestic and international levels. to this end, the fsb proposed a comprehensive global framework for the effective regulation of crypto - asset activities, including stablecoins, in october last year. this framework embeds the principle of'same activity, same