vulnerabilities ( under the leadership of fsb vice chair klaas knot of de nederlandsche bank, here today ) is an important forum and catalyst for this work. in the months ahead, the committee will develop a new framework for the 2 / 4 bis central bankers'speeches identification and assessment of financial vulnerabilities. their efforts will rely on transparent engagement with a wide range of stakeholders — including banks and nonbank financial institutions, the academic community, financial regulators, national authorities, and standardsetting bodies. this kind of broad outreach is essential. the causes of financial crises rarely announce themselves ahead of time, and only a wide range of views can give us the perspective and understanding to address them in advance. the right model for this work is not a small team of detectives — it is a search party. the fsb ’ s efforts on nonbank financial intermediation, which i discussed last week, reflect a similar approach. nonbank financing has grown since the financial crisis, and it has been a source of systemic risk, often involving high leverage, maturity and liquidity mismatches, opaque structures, and concentrated holdings of risky assets. nonbank financing can also lead to lower lending standards, bidding up the price of risky assets and sending an encouraging signal to credit underwriters. these channels played a role in the recent global financial crisis, and more recently, new forms of interconnectedness between nonbank financial firms and the banking system have emerged. in some scenarios, both domestically and internationally, such ties could amplify risks. these developments raise important issues. is the growth of nonbank financing altering existing market structures? are there new vulnerabilities in the financial system? how will nonbank financing develop, and how should it do so? the fsb is taking a variety of complementary approaches to answering these questions. first, we produce an annual report that outlines the developments in nonbank financing, detailing global trends and potential risks and providing reliable information to foster public discussion. second, the fsb develops policies to promote the resilience of these firms ( without impeding the growth of sustainable nonbank financing models ), and we work closely with other multinational organizations to monitor implementation. finally, and going forward, we must begin analyzing the effectiveness of the policies on nonbank financing that have been implemented. analysis the same spirit of self - reflection should guide the fsb ’ s efforts in other policy areas. stakeholders trust the fsb to undertake thoughtful

spring ), pp. 165 – 86. 1 the views i express here are my own and not necessarily those of the federal reserve board or the federal open market committee. 2 2. the imf ’ s most recent forecast was released in january and is available on its website at www. imf. org / en / publications / weo / issues / 2018 / 01 / 11 / world - economic - outlook - update - january - 2018. 3 3. the most recent summary of economic projections, an addendum to the minutes of the december 2017 fomc meeting, is available on the www. federalreserve. gov / monetarypolicy / fomcminutes20171213ep. htm. board ’ s website at 4 4. reinhart and rogoff ( 2009 ) document the lasting effect that downturns related to a financial crisis can have on economic growth. 5 5. see aaronson and others ( 2014 ). 6 / 7 bis central bankers'speeches 6 6. see hatzius and others ( 2016 ) for an overview of some issues that new technologies and products may be introducing into the measurement of gdp and productivity. 7 7. see syverson ( 2017 ) and byrne, fernald, and reinsdorf ( 2016 ). 8 8. gordon ( 2016 ) argues that recent technological advances have been relatively minor compared with the large advances that drove rapid increases in productivity in the past. 9 9. see decker and others ( 2016 ). 10 10. for a historical measure of the fiscal policy ’ s contribution to gdp growth, see the hutchins center fiscal impact measure, available on the brookings institution website at www. brookings. edu / interactives / hutchinscenter - fiscal - impact - measure. 11 11. see brynjolfsson and mcafee ( 2014 ) and baily, manyika, and gupta ( 2013 ). 12 12. brynjolfsson, rock, and syverson ( 2017 ) argue that lags in the adoption of new technology could explain the paradox between apparent advances in technology and continued weak productivity growth. they are referring specifically to artificial intelligence, but the argument could also hold for other fields. 13 13. see board of governors ( 2018 ). 7 / 7 bis central bankers'speeches