Salzburg Global Forum on Finance in a Changing World » Overview

The Salzburg Global Forum on Finance in a Changing World is an annual high-level program convened by Salzburg Global Seminar that addresses issues critical to the future of financial markets and global economy in the context of key global trends.

Established in 2011, the Forum offers senior and rising leaders from the financial industry and public sector an opportunity for in-depth, off-the-record conversations on how to build inclusive, open and resilient financial systems and set an agenda for the future.

The Forum’s overarching goal is to facilitate critical analysis of the changing financial landscape and regulatory environment, comparison of practical experience around the world, understanding of technology-driven transformations, and open dialogue on issues of trust and ethics. Each summer, it convenes an internationally representative group of leaders from financial services firms, supervisory and regulatory authorities, consultancies, auditors, law firms and other professional service providers who share a belief that inclusive, efficient and stable financial systems are essential for sustainable growth, shared economic opportunities and prosperity. Going forward, the Forum will continue to explore key developments, strategic shifts and tipping points in global finance, and to help participants learn practical lessons and share international insights.


Susan Revell – A workplace that doesn’t reflect society won’t attract the talent it needs
Susan Revell participated in the third session of Salzburg Global forum on corporate governance
Susan Revell – A workplace that doesn’t reflect society won’t attract the talent it needs
Mirva Villa 

“‘Courageous director’ for me would be somebody who is willing to speak up, stand out, take a path maybe less traveled,” said Susan Revell, general counsel and chief controls officer for Europe, the Middle East, and Africa (EMEA) at BNY Mellon.

Revell, who leads the Legal, Risk, Compliance and Corporate Project Management Office and regional area management teams across EMEA, reflected on the role while attending the third session of the Salzburg Global Forum on Corporate Governance.

“Courage and independence may actually be quite similar bedfellows in a way,” she added. “I think you need to be courageous if you want to constructively challenge or if you want to be respectfully confrontational in the boardroom.”

Passionate about improving diversity and inclusion in the workplace, Revell is the EMEA executive sponsor for BNY Mellon’s Women’s Initiative Network (WIN).

Revell revealed she’s been fortunate never to have felt like her gender was a constraining factor in her career.

“I’ve hopefully been enabled by my sponsors and my mentors to get involved in things which have seen me grow and develop at the companies I’ve worked for. I think society perhaps hasn’t changed as much as I would have hoped over the last 20 years,” Revell said.

After speaking with some of the young women in their regional offices at BNY Mellon earlier this year, Revell found a lot of stereotypical responsibilities - such as looking after children or caring for elderly parents - still fell on young women.

By sponsoring the network, Revell has been able to show her support for female employees by giving them tools and helping them seek out real role models they can relate to or aspire to be professionally.
Revell said, “It's ensuring that the females in our employee population have fulfilling careers and that they can see the next stage of development.”

To improve diversity and inclusion in the workplace, all parties have to be involved in the conversation.

“I try to encourage the men in our group to engage and learn and not be fearful of the gender diversity discussion,” said Revell. “I'm very keen on ensuring that men are advocating for real change too, whether it's because they know it's the right thing to do naturally, or whether they want to ensure that their daughters have that satisfying and fulfilling career experience… I don't mind where they come from, but together we can make change.

“My challenge to us all is to bring the society forward.”

Earlier this year, BNY Mellon was recognized for their efforts in increasing its commitment to gender equality in the workplace. It received a perfect score in the 15th edition of the Human Rights Campaign’s Corporate Equality Index, which rates workplaces on lesbian, gay, bisexual and transgender equality. It was also included in the Times Top 50 Employers for Women.

Commenting on the latter achievement, Revell said, “I think that says something about our culture. Hopefully, something around it being a fulfilling place to work, with strategies and resources in place that enable rather than constrain.

“I think it is a place which appreciates difference and leveraging difference, but in a collegiate and collaborative way and looking to build consensus, at the end of the day. I think those are some of the things that make BNY Mellon an attractive place… I joined four years ago, and I'm very pleased I made that decision.”

Concern for the diversity of the workforce has recently been brought up in discussions related to Brexit. Revell says she believes that any geo-political fragmentation, where people behave more exclusively, is likely to be somewhat damaging.

“But my professional job is to ensure that we make the best of the hand of cards that we've been dealt and look after our employees and our clients, and ensure the management is thinking creatively about how we use the opportunities that Brexit provides to our company, as well as thinking about how do we limit some of the more damaging aspects.”

Participants at this year’s Salzburg Global Forum on Corporate Governance considered several key questions. Among those was: Should board composition reflect the nationalities and demographics of the shareholders, employees, customers, communities served, and supply chains?

When asked why diversity is important, Revell said, “I think you need to reflect society, and if a workplace doesn't reflect society then it isn't going to be able to attract and retain the talent that it needs - that we all need in a world where there isn't enough talent to go around it.”


The Salzburg Global program The Courageous Director: Can Corporations Better Serve People, Planet, and Profit? is part of the multi-year series, the Salzburg Global Forum on Corporate Governance. The session is being supported by Shearman & Sterling LLP, BNY Mellon, UBS, Barclays, CLP Group, Goldman Sachs, and Teledyne Technologies. More information on the session can be found here.

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Stephanie Bertels – Companies need to think about their long term strategy, not just their quarterly returns
Stephanie Bertels participated in the third session of the Salzburg Global Forum on Corporate Governance.
Stephanie Bertels – Companies need to think about their long term strategy, not just their quarterly returns
Mirva Villa 

Toward the end of 2015, leaders representing more than 200 nations approved a set of goals to transform the world for the better. The Sustainable Development Goals (SDGs) aimed to tackle issues such as poverty, education, hunger, and climate change. It was agreed at the time – and remains the case – that for these goals to be achieved, everyone will have to play a role.

The topic of how corporations have embedded sustainability to their agenda came up in discussion during the third session of the Salzburg Global Forum on Corporate Governance. This was in part thanks to Stephanie Bertels, the director of the Centre for Corporate Governance and Sustainability at Simon Fraser University’s Beedie School of Business and founder of the Embedding Project.

The Embedding Project, founded and led by Bertels, is a community of practitioners and researchers who are working together to help companies include environmental and social factors into their operations and decision making.

“The partner companies come to us with their needs what they’re grappling with and then using rigorous research methods we help support their understanding of those issues,” Bertels said. The Embedding Project team will help organizations to re-determine their core strategies with their new goals in mind.

“By that I mean, what would your core strategy look like if you took seriously the idea that you, as a company, need to meet and help contribute to strong social foundations, and that you need to adhere to a set of planetary boundaries?” said Bertels. The tools created by the community assist the company in deciding what their thinking is around a social or environmental issue, and what kind of commitments the company will need to adhere to reach their long term goals.

While big companies have often taken part in philanthropic efforts in one way or another, the concept of corporate social responsibility first started to take form in the 1950s, with companies beginning to be seen obligated to address the social issues around them. Since the early 2000s the movement has grown into a global phenomenon, as consumers and job seekers are increasingly pushing for companies to take steps toward more ethical behavior. Sustainability’s place in today’s corporate governance is “pretty fundamental”, according to Bertels.

“As fiduciaries of a company, you need to be thinking about not just the quarterly returns, but the longer term strategy, the survival and thriving of the organization. Understanding societal expectations and how environmental constraints are going to shape that strategy is completely crucial.”

According to Bertels, the environmental constraints on business have become increasingly clear in the recent years. Issues such as climate change present both challenges and opportunities – and boards are starting to understand that they have to be aware how these issues might impact their business.

“It’s hard in this day and age to manage a company, direct, oversee, provide a strategic oversight to an organization without asking questions about – and expecting good quality disclosure about – the risks and opportunities of social and environmental issues.”


The Salzburg Global program The Courageous Director: Can Corporations Better Serve People, Planet, and Profit? is part of the multi-year series, the Salzburg Global Forum on Corporate Governance. The session is being supported by Shearman & Sterling LLP, BNY Mellon, UBS, Barclays, CLP Group, Goldman Sachs, and Teledyne Technologies. More information on the session can be found here.

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Salzburg Global Fellow Randal K Quarles confirmed as member of US Federal Reserve board
Salzburg Global Fellow Randal K Quarles confirmed as member of US Federal Reserve board
Oscar Tollast 

Salzburg Global Fellow Randal K. Quarles has been confirmed by the U.S. Senate as a member of the Federal Reserve board.

Quarles, 60, was nominated by President Donald Trump in July to serve as the Federal Reserve's vice chairman for supervision.

Last week he won confirmation by a 65-32 vote in the Senate and became Trump's first confirmed Fed nominee.

Quarles is also the first person to serve in the role and become part of a new approach to financial regulation, as highlighted by The Economist.

Mr. Quarles previously worked in the Treasury Department under President George W. Bush between 2002 and 2006, serving first as assistant secretary for international affairs and then as under secretary for domestic finance.

In 2014, he helped establish the Cynosure Group, a Salt Lake City-based company which makes long-term equity investments in private companies across a range of industries.

Mr. Quarles has taken part in several programs at Salzburg Global. He first attended Schloss Leopoldskron in 2013 for Session 516 - Out of the Shadows: Regulation for the Non-Banking Financial Sector.

The following year, he was a participant at Session 546 - The Future of Banking: Is There a Sustainable Business Model for Banks? He took part in his third Salzburg Global Forum on Finance in a Changing World in 2015 when he attended Session 552 - The Future of Financial Intermediation: Banking, Securities Markets, or Something New?

His most recent appearance at the Forum, and Salzburg Global was in 2016 when he attended Session 563 - Financing the Global Economy: How Can Traditional and Non-Traditional Sources Be Integrated?

The Salzburg Global Forum on Finance in a Changing World is an annual high-level program convened by Salzburg Global which addresses issues critical to the future of financial markets and global economy in the context of key global trends. 

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Report now online - Global Challenges, Regional Responses: How Can We Avoid Fragmentation in the Financial System?
Report now online - Global Challenges, Regional Responses: How Can We Avoid Fragmentation in the Financial System?
Aceel Kibbi 

The report of the Salzburg Global session Global Challenges, Regional Responses: How Can We Avoid Fragmentation in the Financial System? is now available to read, download and share.

The 2017 session of the Salzburg Global Forum on Finance in a Changing World brought together  57 financial leaders from 19 countries across different sectors and regions to discuss emerging risks to the financial system and potential solutions; to review obstacles to global coordination and cooperation in the light of increasing fragmentation; to assess progress in implementing the regulatory reform agenda against the backdrop of ongoing realignment in the global economy; and to outline priority steps to strengthen the global financial system.

The report, written by Silke Finken, Professor at the International School of Management in Munich, Germany, provides an executive summary of the discussions from the intensive two-day program. Also included is a list of all participants in attendance, the opening speech of the Session Co-Chair Ranjit Ajit Singh, Executive Chairman, Securities Commission Malaysia, and the remarks of Jerome Powell, Member of the Board of Governors, US Federal Reserve System.   

Download the report as a PDF


The Salzburg Global session Global Challenges, Regional Responses: How Can We Avoid Fragmentation in the Financial System? is part of Salzburg Global’s long-running Salzburg Global Forum on Finance in a Changing World. More information can be found here: SalzburgGlobal.org/go/580

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Securities Commission Malaysia and ASIC sign agreement at Salzburg Global
Securities Commission Malaysia and ASIC sign agreement at Salzburg Global
Oscar Tollast 
Securities Commission Malaysia (SC) and the Australian Securities and Investments Commission (ASIC) marked the start of a new partnership with a signing ceremony at Salzburg Global. Both organizations have entered an Innovation Co-operation Agreement to encourage innovation in fintech services in their respective markets. Ranjit Ajit Singh, chairman of SC, and Greg Medcraft, chairman of ASIC, signed the agreement while attending the Salzburg Global Forum on Finance in a Changing World - Global Challenges, Regional Responses: How Can We Avoid Fragmentation in the Financial System? The signing event took place at Schloss Leopldskron.  In a media release, SC said both organizations would work closely to share information on emerging trends and regulatory issues in digital finance. They will also facilitate referrals of innovative businesses looking to operate in each other's jurisdictions and review potential joint innovation projects linked to the application of new technologies. Singh said, “Even as we continue to enable new forms of innovation in capital markets, we must not lose sight of the need to manage digital risks, by taking a strategic approach to risk management, recruiting digital talent and improving IT architectures. "This collaboration between SC and ASIC in the realm of digital finance will further strengthen the cooperative arrangements between Malaysia and Australia in capital market development and regulation." Medcraft sits on Salzburg Global's Board of Directors and chaired last year's Salzburg Forum on Global Finance in a Changing World - Financing the Global Economy: How Can Traditional and Non-Traditional Sources Be Integrated?   Commenting on the agreement, Medcraft said, "International cooperation on fintech is essential. This agreement will help local businesses grow beyond our borders, and improve our understanding of fintech in the region. We look forward to working more closely with our colleagues at the Malaysian Securities Commission." Singh was co-chair of the Salzburg Global Forum on Finance in a Changing World - Global Challenges, Regional Responses: How Can We Avoid Fragmentation in the Financial System?  This year's Forum explored the emerging risks facing global financial markets and the prospects for supporting economic growth in the future. Participants were asked to consider whether better systems to co-ordinate global financial regulation existed and the risks arising from the increasing fragmentation of markets.
The Salzburg Global program Global Challenges, Regional Responses: How Can We Avoid Fragmentation in the Financial System? is part of the multi-year series Salzburg Global Forum on Finance in a Changing World. The session is hosted in partnership with Ernst & Young, HSBC, JP Morgan Chase & Co., Oliver Wyman and supported by Clearly Gottlieb, Davis Polk, Deutsche Bank, Buckley Sandler, The Cynosure Group, Dynex Capital Inc., and State Street. More information on the session can be found here: www.salzburgglobal.org/go/580 
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Ranjit Ajit Singh - Long-termism and sustainability must form the lynchpins of our economic philosophy
Ranjit Ajit Singh - Long-termism and sustainability must form the lynchpins of our economic philosophy
Ranjit Ajit Singh 
Below are the remarks of Ranjit Ajit Singh from his opening address at the 2017 session of the Salzburg Global Forum on Finance in a Changing World - Global Challenges, Regional Responses: How Can We Avoid Fragmentation in the Financial System? Mr. Stephen Salyer, President & Chief Executive Officer, Salzburg Global Seminar, Sylvie Matherat, my fellow co-chair of the seminar, distinguished participants, ladies and gentlemen, good morning. I am delighted to be here in the lovely location of Salzburg.   And as I stand here, I am reminded that the best test of any human construct or invention lies in its ability to adapt and remain relevant in the face of the only constant of this world – change. The Salzburg Global Seminar on Finance in a Changing World aims to do just that – to stimulate important conversations on major trends unfolding across today’s financial landscape, as well as the implications they bring, and the responses they necessitate, in this small but highly influential gathering of leading policymakers, regulators, market practitioners and experts in the global financial services sector.  I would like to take this opportunity to thank Stephen Salyer and Tatsiana Lintouskaya for their gracious invitation to be here today and convincing me to co-chair this very important event.  Fragmentation in today’s world  Ladies and gentlemen,  I would like to take some time this morning to offer a few of my observations on global developments and the impact of fragmentation on the financial system. While I do not profess to have solutions for the challenges that confront us, I hope that this will provide some perspectives in our conversations over the next two days.  The theme of this year’s Seminar is timely, as policymakers and regulators around the world respond to the impact of ongoing political and socioeconomic developments. In my view, there are several permutations to fragmentation that transcend economic, social and geographical boundaries.  Open and integrated financial markets are under threat from political and economic challenges stemming in part from growing backlash against globalization and calls for protectionism policies among many countries. The backlash stems partly from concerns of growing social fragmentation with growth not being evenly spread across the income spectrum, reflecting an increasingly widening inequality gap. Today, we live in a world where the richest 1% is said to own more wealth than the rest of the world population [1]. Globalization has also resulted in increased inequality within countries, which is particularly pronounced in some advanced economies of the world.   In contrast, one-third of all food produced for human consumption in the world (around 1.3 billion tons) is lost or wasted, with most wastage occurring in developed markets [2]. In terms of climate change, the share of national GDP at risk from climate change is expected to exceed USD1.5 trillion in 301 major cities (expected to account for two-thirds of the world’s GDP) around the world by 2025 [3]. There are also structural implications arising from technological progress and innovation on employment and job displacement, which are very real. While automation has the potential to increase productivity and economic growth, it also raises concerns on implications to jobs, skills, and wages.  Such developments, if taken to extreme, may even fragment the existing social order. Despite recent geopolitical outcomes, the pivot away from globalization that we see is very much a symptom of deeper rooted socioeconomic imbalances, rather than a root cause of its own. It has also been aggravated by the challenging external environment of heightened uncertainty, low growth and high debt and growing inequality. Ladies and gentlemen, The second aspect of fragmentation relates to economic fragmentation. We have been observing a realignment of global markets, in terms of the presence and significance of emerging markets within the global financial landscape. Emerging economies contribute nearly 60% of global GDP, as compared to 10 years ago when they accounted for only about 30% of global GDP [4].  Global population, in turn, is expected to reach over 9 billion by 2050 with the majority of this growth driven by emerging markets [5]. The significance of emerging markets was reinforced by the IMF Managing Director Christine Lagarde in a speech where she said – “Emerging and developing economies are home to 85% of the world’s population, and these 85% matter to the global economy more than ever, and they matter to you more than ever – because of strong linkages through trade, finance, economics, geopolitics, and personal connections that you experience every day” [6].  In shaping the global agenda, it is critical therefore to consider the heterogeneity of markets with varying economic and social dimensions, and are motivated by different needs. The agenda cannot be one that is premised on a one-size-fits-all model that is driven, and sometimes dictated, by advanced markets. Given the number and growing economic significance of emerging markets, there needs to be a more balanced debate on international regulatory reforms and better inclusion of these considerations in international policy formulation. Otherwise, we risk perpetuating this divide and fragmentation even further. Ladies and gentlemen The third aspect of fragmentation relates to an area close to what I do and that is regulatory fragmentation. The world’s capital markets currently make up more than half of global financial assets. Further, a corollary of the narrowing of traditional financing channels as banks adopt a more conservative lending appetite (in line with more stringent prudential requirements) is the greater reliance on capital market-based financing. Prudential regulation and financial stability issues, however, continue to dominate global policy regulation and often is not reflective of the significant role of capital markets in the overall financial system.  For example, there are instances where prudential regulations are being expanded to reach capital market and non-bank entities which by their nature are different from banks. There is also greater focus on issues relating to market regulation, which have traditionally been within the realm of securities regulators further creating duplication and potential fragmentation in regulation. To reflect the multiple dimensions of global financial regulation and to minimize these unintended consequences on capital markets, there needs to be concerted efforts to increase the representation of capital market regulators in international financial policy-making. Today capital market regulators (both from developed and emerging markets) are severely under-represented in the configuration of some international organizations at a time when market-based financing is increasingly growing.  New paradigms of globalization  The important question for policy makers, regulators, and market practitioners is not whether we should accept or reject globalization, but rather, how do we ensure that that global policy making and regulation leverage on each other and do not perpetuate fragmentation even further and impose undue costs and disruption to the market. As global finance interconnects us, there needs to be, as the Salzburg Global Forum in their efforts of Bridging Divides seeks to do, much greater emphasis placed on bridging the divides and creating greater links to financial development to minimize the risk of further polarization. There is also a need to redefine the paradigms of globalization and re-orientate our development philosophy towards more inclusive access to opportunities that transcend geographical and socio-economic boundaries Growth must be sustainable across generations and be able to support optimal quality of life for those living within the ecosystem. This includes strengthening the safety nets to ensure sustainability of our retirement systems against the backdrop of an aging population. Are the needs of the aging population being catered to and do they have opportunities for wealth creation through effective savings and pensions structures?  To ensure a meaningful response to many of these issues I described earlier, it is clear that long-termism and sustainability must form the lynchpins of our economic philosophy. This is a central theme as we contend with not only finite but depleting resources, as the forces of globalization impact inclusivity and social inequalities. Sustainable capitalism  Ladies and gentlemen, A healthy financial system is vital for the well-functioning of the global economy. It is however observed that finance has also gained a momentum of its own and has become somewhat detached from the real world of industry, manufacturing, services, agriculture, thereby outpacing growth in the real economy and distorting public’s trust and confidence in the financial system along the way.  In order to make finance work for the real world, rapid financial proliferation should be balanced with a more democratized financial system to meet the needs of diversified stakeholders across different segments of society. It cannot be solely anchored on small but influential segments of the economy, whether they be the more advanced markets, the larger companies and institutions or the wealthy and elite individuals.  One clear example is the disconnect between the traditional financial system and the younger generation, where structural inadequacies within the system have helped catalyze new forms of alternative financing and investments enabled by technology (crowdfunding, mobile payments, and investments etc.).   With its ability to provide long-term financing to encourage and sustain business activity, innovation, and infrastructure development, it is critical to have deep and interconnected capital markets that can safely and efficiently allocate investments needed to achieve these outcomes. Global challenges, such as climate change, require significant investments, with the World Economic Forum estimating that an additional investment of US$700 billion per annum is needed to provide for clean energy infrastructure, sustainable transport, energy efficiency and forestry [7]. Due to the sheer scale and duration of financing required, it is argued that capital markets have the appropriate mobilization and risk diversification capacity to fulfill this demand. Further, Islamic finance, based on principles of equitable and participatory growth with emphasis on risk sharing, can also play an increasingly pivotal role in promoting sustainable finance. As Islamic finance transactions need to be supported by genuine economic activities, it is also therefore firmly linked to the real economy.  Conclusion Ladies and gentlemen, Globalization in its current form is not a viable option, nor is fragmentation or permutations of it, the solution to the challenges we face. What is required is a common set of minds to shift the global ecosystem to make the economy and financial system more inclusive and sustainable for all. A world which incentivizes short-term maximization at the individual level over long-term optimization at the aggregate level is not a world that produces sustainable outcomes for the present as well as the future generation. We are at a critical juncture. As stewards of global finance, our actions - or even inaction - in the coming years will be a crucial determinant of the state of resilience and integrity of our economies.  I wish you a productive discussion in the days ahead. Thank you. References
  • [1] Oxfam (January 2017), “An economy for the 99%”, Briefing paper
  • [2] Food and Agriculture Organization of the United Nations (FAO)
  • [3] Harvard Business Review, (2017), “If You Think Fighting Climate Change Will Be Expensive, Calculate the Cost of Letting It Happen”
  • [4] Christine Lagarde, (4 February 2016), “The Role of Emerging Markets in a New Global Partnership for Growth”
  • [5] United Nations Department of Economic and Social Affairs (2015), “World Population Prospects: The 2015 Revision”
  • [6] Christine Lagarde, (4 February 2016), “The Role of Emerging Markets in a New Global Partnership for Growth”
  • [7] World Economic Forum (2013), “The Green Investment Report: The ways and means to unlock private finance for green growth”

Ranjit Ajit Singh, executive chairman of the Securities Commission (SC) Malaysia, was speaking at the opening day of Global Challenges, Regional Responses: How Can We Avoid Fragmentation in the Financial System?, the seventh session of the Salzburg Global Forum on Finance in a Changing World.
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Jerome Powell - We Must Be Vigilant Against New Banking Risks
Jerome Powell - We Must Be Vigilant Against New Banking Risks
Jerome Powell 

Below are the remarks of Jerome Powell from the opening panel of the 2017 session of the Salzburg Global Forum on Finance in a Changing WorldGlobal Challenges, Regional Responses: How Can We Avoid Fragmentation in the Financial System?

I appreciate the opportunity to speak at Salzburg Global Seminar. Today I will discuss our current regulatory regime, and areas where we may be able to make adjustments. As always, the views I express here are my own.

We need a resilient, well-capitalized, well-regulated financial system that is strong enough to withstand even severe shocks and support economic growth by lending through the economic cycle. The Federal Reserve has approached the post-crisis regulatory and supervisory reforms with that outcome in mind.

There is little doubt that the U.S. financial system is stronger today than it was a decade ago. Loss-absorbing capacity among banks is substantially higher as a result of both regulatory requirements and stress testing exercises. The banking industry, and the largest banking firms in particular, face far less liquidity risk than before the crisis. And progress in resolution planning by the largest firms has reduced the threat that their failure would pose. These efforts have made U.S. banking firms both more robust and more resolvable.

Evidence overwhelmingly shows that financial crises can cause severe and lasting damage to the economy's productive capacity and growth potential. Post-crisis reforms to financial sector regulation and supervision have been designed to significantly reduce the likelihood and severity of future financial crises. We have sought to accomplish this goal in significant part by reducing both the probability of failure of a large banking firm and the consequences of such a failure were it to occur.

As I mentioned, we have substantially increased the capital, liquidity, and other prudential requirements for large banking firms. These measures are not free. Higher capital requirements increase bank costs, and at least some of those costs will be passed along to bank customers and shareholders. But in the longer term, stronger prudential requirements for large banking firms will produce more sustainable credit availability and economic growth.

Our objective should be to set capital and other prudential requirements for large banking firms at a level that protects financial stability and maximizes long-term, through-the-cycle credit availability and economic growth. To accomplish that goal, it is essential that we protect the core elements of these reforms for our most systemic firms in capital and liquidity, stress testing and resolution.

With that in mind, I will highlight five key areas of focus for regulatory reform. The first is simplification and recalibation of regulation of small and medium-sized banks. We are working to build on the relief we have provided in the areas of call reports and exam cycles, by developing a proposal to simplify the generally applicable capital framework that applies to community banking organizations.

The second area is resolution plans. The Fed and the Federal Deposit Insurance Corporation believe that it is worthwhile to consider extending the cycle for living will submissions from annual to once every two years, and focusing every other of these filings on key topics of interest and material changes from the prior full plan submission. We are also considering other changes, as I discussed last week when testifying to Congress.

Third, the Federal Reserve is reassessing whether the Volcker rule implementing regulation most efficiently achieves its policy objectives, and we look forward to working with the other four Volcker rule agencies to find ways to improve that regulation. In our view, there is room for eliminating or relaxing aspects of the implementing regulation in ways that do not undermine the Volcker rule's main policy goals.

Fourth, we will continue to enhance the transparency of stress testing and the Comprehensive Capital Analysis and Review (CCAR). We will soon seek public feedback concerning possible forms of enhanced disclosure, including a range of indicative loss rates predicted by the Federal Reserve's models for various loan and securities portfolios, and information about risk characteristics that contribute to the loss-estimate ranges. We will also provide more detail on the qualitative aspects of stress testing in next week's CCAR disclosure.

Finally, the Federal Reserve is taking a fresh look at the enhanced supplementary leverage ratio. We believe that the leverage ratio is an important backstop to the risk-based capital framework, but that it is important to get the relative calibrations of the leverage ratio and the risk-based capital requirements right.

U.S. banks today are as strong as any in the world. As we consider the progress that has been achieved in improving the resiliency and resolvability of our banking industry, it is important for us to look for ways to reduce unnecessary burden. We must also be vigilant against new risks that may develop. In all of our efforts, our goal is to establish a regulatory framework that helps ensure the resiliency of our financial system, the availability of credit, economic growth, and financial market efficiency. We look forward to working with our fellow regulatory agencies and with Congress to achieve these important goals.

And finally, I would also like to note that work continues to address the risks identified with existing reference rates. Just last week, the Alternative Reference Rates Committee (ARRC) selected a new rate suitable for use with new derivative contracts. I am confident the broad Treasuries repo rate, which the Federal Reserve Bank of New York has proposed publishing in cooperation with the Office of Financial Research, is based on a deep and actively traded market and will be highly robust. With this choice, the ARRC has taken another step in addressing the risks involved with the LIBOR.


Federal Reserve Governor Jerome Powell was speaking at the opening day of Global Challenges, Regional Responses: How Can We Avoid Fragmentation in the Financial System?, the seventh session of the Salzburg Global Forum on Finance in a Changing World.

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