daniel k tarullo : international cooperation to modernize financial regulation testimony of mr daniel k tarullo, member of the board of governors of the us federal reserve system, before the subcommittee on security and international trade and finance, committee on banking, housing, and urban affairs, washington dc, 30 september 2009. the original speech, which contains various links to the documents mentioned, can be found on the us federal reserve system ’ s website. * * * chairman bayh, ranking member corker, and other members of the subcommittee, i appreciate the opportunity to testify today on the role of international cooperation in modernizing financial regulation. international cooperation is important for the interests of the united states because, as has been graphically illustrated in the past two years, financial instability can spread rapidly across national boundaries. well - devised international financial regulatory standards can help encourage all nations to maintain effective domestic regulatory systems. coordinated international supervisory arrangements can help ensure that every large, internationally active financial institution is effectively supervised. both these forms of international cooperation can, at the same time, promote at least a roughly equivalent competitive environment for u. s. financial institutions with those from other nations. in my testimony this afternoon, i will review the responses of key international regulatory groups to the financial crisis, including both substantive policy responses and the organizational changes in membership and working methods in some of those groups. next i will describe specifically the role of the federal reserve's participation and priorities in these international regulatory groups. i will conclude with some thoughts on the challenges for international regulatory cooperation as we move forward from the g - 20 pittsburgh summit and the exceptionally active international coordination process that has preceded it. the response of international regulatory groups to the crisis over the past few decades, international cooperation in financial regulation has generally been pursued in a number of groups that bring together national authorities with responsibility for regulating or supervising in a particular area, or that served as venues for informal discussion. several of the functional regulatory groups have undertaken initiatives in response to the recent financial crisis. during this period, the financial stability board ( fsb ) shifted from being more of a discussion forum to serving as a coordinator of these initiatives. the fsb was also the direct line of communication between these groups and the g - 20. the federal reserve actively participates in the fsb as well as in the following international groups : - in the committee on payment and settlement systems, we work with other central banks to promote sound and efficient payment and settlement systems. - in the committee on

in south africa, and none among the g - 7 advanced economies. since then, two other women have led g20 central banks, and now i have the honor of serving with the first woman to lead the federal reserve, janet yellen. so what ’ s my take away from that experience? it was a good reminder to me that we have to see the challenges that are right in front of our eyes if we want to address them and we should not be satisfied until the people sitting around every decisionmaking table look like america in all its rich diversity. earlier this year, the federal reserve bank of atlanta hired raphael bostic as its president and chief executive officer, the first african - american to lead a reserve bank. i look forward to the day when we have moved far beyond all the firsts, when we can see with satisfaction that the people of the federal reserve fully reflect the characteristics of the american people. we are working hard to get there, but we still have a long way to go. of course, getting to that point in the future starts with people like you and the paths you choose today. you should choose the path where you feel you will make your greatest contribution — the one that is right for you. but if economics seems like a great fit, then choose it with the confidence that you have the capacity to make an important contribution that will be valued. so with that, i will be glad to respond to your questions. 1 amanda bayer and cecilia elena rouse, ( 2016 ) “ diversity in the economics profession : a new attack on an old problem, ” journal of economic perspectives, vol. 30, no. 4 ( fall ), pp. 221 – 42. 3 / 3 bis central bankers'speeches