 Okay. So it's a really good afternoon. We'll come back from the coffee break. I'm Luke Lavin. I'm the Research Director here and co-organizer of this event, and it's my great pleasure to introduce our next keynote speaker, Vice Chairman Kuals from the Federal Reserve Board. A very warm welcome to the ECB. I understand it's your first time in this building, beautiful building, and I just wanted to give a very quick introduction. So Vice Chairman Kuals was born in San Francisco and raised in Utah, and he brings to his current role at the FAT, a very rich and diverse experience, both in the public and the private sector, which I think is always a boon in supervision, having approached issues from both sides. Meaning he has been at the US Treasury during several administrations, back and forth with the private sector, primarily in private equity, I understand. He has degrees from both Columbia and Yale in economics and law. Again, a great combination. So it's my great pleasure that you're with us here today, and the floor is yours. Thank you. Thank you. Thanks, Luke, very much for that introduction, and it's a pleasure to be here at the ECB. I think technically I'm speaking in my capacity as chair of the Financial Stability Board to help celebrate the Journal of Money, Credit, and Banking's 50th anniversary. The broad scope of the JMCB and the diversity of its scholarship parallels in many ways the FSB itself. As we dealt with the global financial crisis, the heads of state and government of the G20 gave the FSB the task of identifying and addressing vulnerabilities in the global financial system, and developing stronger regulatory and supervisory policies in the pursuit of financial stability. That broad mandate has considerable overlap with the fields that JMCB covers in its pages. As most of you will know, the FSB covers 24 jurisdictions, there are 73 different representatives, all the members of the G20, and also similar to the JMCB, we're celebrating an anniversary this year, with its creation having occurred 10 years ago. That's a far cry from the JMCB's 50 years, but I hope that in time our continuing work, and not just the response to the crisis, will prove valuable enough that we will one day merit a similar celebration. Now, I'm especially pleased to be speaking at this conference today because the FSB welcomes and encourages the participation of academics in tackling issues of global financial stability. I'd like to see a greater and more direct contribution of academic subject matter experts to our work. You may have noticed that the FSB sent out a call for nominations last month for academics to advise our work in evaluating post-crisis reforms. In this particular instance, the evaluation that will examine the effects of too big to fail policies that the G20 endorsed in 2010, and that the FSB and other standard setters have implemented since then. In our initiatives to examine the consequences of post-crisis reform, the academic community can help advance the field with analytical tools and critical insight. Now, the financial crisis exposed fault lines in the financial system that had to be addressed immediately, comprehensively, and vigorously. The body of post-crisis regulation that resulted was founded on the work of academics, including important papers published in the JMCB, and also involved the energy and efforts of many standard setters, many regulators, supervisors, central banks. It was an exemplary feat of cooperation and coordination. It's unquestionably made the financial system safer and more resilient. But today, the post-crisis agenda has been largely completed. Basel III is final. The largest global banks have substantially more capital and liquidity. Over-the-counter derivative markets are safer, and steps have been taken to address the risk of too big to fail institutions. Through greater monitoring and policy measures, the FSB is addressing risk from non-bank financial intermediation, and there's been remarkable progress on the difficult and unglamorous task of establishing workable resolution regimes that are consistent with the FSB's clearly defined principles. While we must still work to ensure full, timely, and consistent implementation of the agreed reforms, it's time for the FSB to turn more of its energy and attention to the future. So in my time with you today, I'd like to do two things. First, I'd like to share with you my view on how the work of the FSB must evolve if we're to merit that future celebration, as well as some of the core principles that I think should inform that evolution. And after discussing those principles, I'm gonna focus your attention on some of the work priorities that the FSB will be addressing throughout 2019 and beyond, including non-bank financing, fintech, and evaluating the too big to fail reforms. So let me turn first to that question of the core principles that should guide the future evolution of the FSB, which I have elsewhere described as engagement, rigor, and analysis. These core principles reflect goals that are both inward and outward looking. From within, FSB members have the occasion to reflect on how our work is executed. That is, we have to ask ourselves how we can accomplish our mission more effectively, improving the financial sector's ability to support economic growth without threatening financial stability. And outwardly, we'll endeavor to reach out to a greater number of constituents and stakeholders for their input on the important financial stability issues that they're encountering. This is also a good time to inform a wider public audience on the nature of our mission in a clear, articulate, and jargon-free manner. First engagement, as the FSB pivots away from the urgency of post-crisis reform development, it's an opportune time to improve our efforts at effective engagement. Recognizing the wide-reaching effects of its work, the FSB must seek input from a broad range of stakeholders, each of whom brings a different perspective to the issues under consideration. While we're directly accountable to the G20, we are, through the G20, accountable to all of the people affected by our actions. And in my view, that means we must engage in genuine, substantial dialogue with all of these stakeholders to a greater and more effective degree than we have in the past. To start with, a relatively simple step, we can strengthen the role of the six regional groups that are a part of the FSB organization. In 2011, as many of you would know, the FSB established six consultative groups representing large regions of the globe, the Americas, Europe, the Middle East and North Africa, Sub-Saharan Africa, the Commonwealth of Independent States, and Asia. The intent was to expand its outreach program beyond the membership in a systematic manner to better reflect the FSB's global mission. Each group meets once or twice a year, helps the FSB obtain broader input into its policy development agenda. These groups should be re-engineered to not only promote implementation of international policy initiatives within their respective regions, but also to be in a strong position to keep abreast of developments in financial markets in those regions and thus inform FSB policy. It's not only outreach, it should also be feedback, and we've initiated a study of the operations of the regional groups that will help inform us on ways to upgrade their effectiveness as both an outreach and a feedback mechanism. Engagement outside of the FSB is also very important to our mission. We currently engage with businesses and institutions and market participants and academics on much of our work. We've conducted in the past public consultations on FSB policy recommendations, but sometimes with very short timetables. We've now established an expectation that public consultation will be at least 60 days to give the public adequate time to comment on FSB proposals, which can at times obviously be quite complex. But beyond public consultation, we must convene more meetings with the private sector and academic community to build a more robust and meaningful and continuing dialogue. For example, we kicked off the work we've undertaken at the behest of the Japanese G20 presidency to study differences in regulatory environments and market conditions across jurisdictions that may have financial stability implications, what's often referred to as market fragmentation. Many other things are also referred to as market fragmentation. One of the first issues is to try to define market fragmentation, but we began by hosting a workshop with key stakeholders and academics. That was quite successful, I think, and I look forward to such interactions being the rule rather than the exception. In addition, we need to improve our interaction and cooperation with other standard setting bodies such as the Basel Committee, the Committee on Payments and Market Infrastructure, the International Association of Mature on Supervisors and the International Association of Securities Commissions. We've worked together in the past, obviously, but we all owe it to the global community to seek out opportunities for improved cooperation and engagement. We also, as part of this effort and engagement, need to improve the transparency of the FSB and to that end, we'll be taking a number of important steps. For example, just this last February, the FSB published a comprehensive work program on its website for the year ahead. That may seem relatively mundane, but it's the first time in the FSB's history that the work program was disseminated publicly. Over the term of my chairmanship, I'll continue to look for steps that will allow all stakeholders to have a more open window into the FSB's decision-making process and products. I think improved transparency into the FSB process is critical to our mission and critical to support our mission, to broad public support of our mission. I'm reminded of Lord Hewitt's famous and often quoted remark concerning the importance of jurisprudence to the public. Not only must justice be done, it must be seen to be done, and we should be able to apply this concept to the field of global financial standards setting. Not only must we seriously listen, we must be seen to listen. The second principle I want to discuss concerns how we assess and mitigate vulnerabilities in the global financial system. The post-crisis reforms address the fault lines that led to the crisis and the contagion effects around the world, but they won't replace the need for vigilance. If we're not rigorously vigilant, we risk still another crisis. What we need are forward-looking methodologies that use the most advanced analytical tools to spot vulnerabilities well in advance before they lead to widespread financial distress and economic costs to the extent we can. Here, the academic community can contribute with cutting edge and robust modeling techniques. We can only mitigate financial vulnerabilities if we identify them accurately and in a timely manner. As such, the FSB's Standing Committee on Assessment of Vulnerabilities under the leadership of the FSB's Vice Chair, Kloss Knot of the Dutch National Bank, will be directing a considerable amount of energy to developing a cutting edge framework for the identification and assessment of financial vulnerabilities so that this is not simply an ad hoc response to the particular flavor of the moment. Again, the principles of transparency and engagement will shape the work of that group. It's important that a wide spectrum of financial participants be brought into the process from banks and non-bank financial institutions to financial regulators to national authorities and multilateral standard-setting bodies in the broad academic community. This task is essential to the mission of the FSB. Financial developments move at a rapid pace and being able to quickly and accurately and methodically assess vulnerabilities is essential if we are to take action to mitigate future crises. Finally, the FSB members must employ a critical eye toward the effect of the regulations that have already been put in place. Many of the reforms have been in place long enough to be evaluated. We can judge whether reforms are having their intended effects and making the financial system more resilient. Are any regulatory reforms causing unintended adverse effects? Can we achieve the same strong level of financial resilience with reforms that are more efficient, more simple, more transparent, more tailored? The FSB must champion efficient and effective regulation in order to maintain public support for the progress we've made. Now I'd like to turn to three prominent issues on the FSB's agenda in 2019. I'll start with two relatively new issues that continue to evolve and grow in sophistication, non-bank financing and fintech, and then I'll turn to the important work we're beginning on evaluating the effects of reforms and aimed at ending too big to fail. For this discussion, let me loosely define fintech as technology-enabled financial innovation that results in material changes to the provision of financial services. As is often the case when technological innovation meets established business, fintech has attracted a great deal of attention, ranging from utopian claims to hostile skepticism. Claims about fintech's promise abound. It has the power and potential to reduce economic inequality, to increase financial inclusion, to boost economic growth. Through the introduction of new methodologies, greater information curation and reduction in processing costs, fintech could potentially reduce financial volatility and vulnerabilities. And we're already seeing significant changes to how many people around the world obtain financial services. For example, in Kenya, a mobile payments technology has introduced mobile wallets to millions of people, many of whom never had a bank account. In the United States, the largest mortgage provider is an online lender. In China, a technology firm started the world's largest money market fund. Yet alongside this growth in fintech, as my predecessor as FSB chair has emphasized, we as regulators must ensure that we maximize the potential benefits and the development of fintech while minimizing the potential risks and costs. The FSB monitors and analyzes the financial stability implications of financial innovation as part of our mandate to identify and address vulnerabilities in the global financial system. Let me outline two areas that we've started to examine in greater detail. The potential effects from the entry of large technology firms into financial services and the potential effects from the growth in decentralized financial technologies. Over the last decade, the world has witnessed an explosion of large technology firms that are weaving themselves into our daily lives, Facebook, Amazon, Apple, Tencent, Baidu. Some of these firms are increasingly providing some financial services such as payments, credit, insurance, asset management. Their involvement can support financial services broadly. For example, their technology can increase the speed and efficiency and the ubiquity of their presence in our lives, may allow them to offer financial services in a more convenient way or at a lower cost to consumers. Further, as they're only dipping their toes into the edges of the financial services water currently, the effect they have on the provision of financial services could grow enormously if they were to dive in or to do a cannonball. Looking at the technologies that underlie some of the recent innovative financial products, we see a move towards decentralization. That is, a movement toward technologies that connect financial market participants directly without an intermediary. Now the potential areas of impact are broad, settling interbank payments, verifying and reconciling trade finance invoices, executing, enforcing and verifying the performance of contracts, and keeping an audit trail to determine money laundering. Both the potential entry of large, established technology companies into financial services, and the ability of technology to decentralize financial transactions raise a number of issues, some of which may touch on financial stability. Technological innovation offers the promise of a substantially more efficient financial system, but new systems, processes, and types of businesses will bring with them novel fragilities. We at the FSB continue to be responsible for ensuring that the financial system be sufficiently resilient, that businesses and households worldwide need not fear the collapse of the system that serves their needs. These are open questions that need to be addressed, and because they touch on issues of financial stability, the FSB is putting significant resources into understanding these potentially important developments. To be clear, we're not trying to oppose innovation because innovation, including fintech, offers the world many potential benefits, but as the group charged with ensuring financial stability, we're not a church yet, we have to work to ensure that we can reap the benefits offered by these new technologies without harming financial stability. We hope to offer some answers to these questions in the coming years, and to do so in line with the principles that I outlined earlier. We'll address the questions with discipline and analytical rigor in a way that incorporates the views of the public and key stakeholders, and it results in answers that are practical and intelligible. The second issue I'd like to address is non-bank financing. Since the global financial crisis, non-bank financing has grown relatively rapidly in both its absolute size and its relative importance in intermediating credit. In the jurisdictions that the FSB closely monitors, non-bank financial assets are just under 50% of total global financial assets, a share that has grown by close to five percentage points since 2009, that's over 10% growth since 2009. Non-bank financial intermediation, the artist formerly known as shadow banking, provides a valuable alternative to bank financing, helps support real economic activity, and accordingly the shift within the financial system towards non-bank financing represents a welcome increase in the diversity of the sources of lending to both firms and households. But even though the core of the financial system is much more resilient than before the global financial crisis with strengthened bank liquidity and bank capital requirements, non-bank financing has been a source of systemic risk. It often features high leverage, maturity and liquidity mismatches, opaque structures, concentrated holdings of risky assets. Non-bank financing can also lead to lower lending standards, bidding up the price of risky assets and sending an encouraging signal to credit underwriters. All of these channels played a role in the recent global financial crisis. More recently, new forms of interconnectedness between non-bank financial firms and the banking system have emerged that could in some scenarios act as channels for domestic and cross-border amplification of risks. So given these potential risks and the large and increasing role for non-bank financing, we need to monitor closely its development. Is the growth of non-bank financing altering existing market structures? Are there new vulnerabilities in the financial system? How will non-banking financing continue to develop? To answer these important questions, the FSB is progressing on three related tracks. First, the FSB produces an annual report that outlines the developments in non-bank financing, detailing the global trends and potential risks. Second, the FSB promotes the resilience of non-banks through the development of a range of policies to address systemic vulnerabilities where they arise, while not impeding the growth of sustainable non-bank financing models. In this way, we hope to promote resilient non-bank financial intermediation. The FSB, working alongside standard-setting bodies such as the Basel Committee and IOSCO, is monitoring the implementation of these policies. And finally, knowing how arrogant it is to expect that we got everything right for the first time around, it's imperative that we start analyzing the effectiveness of the policies that have been implemented. How should we alter our policies? Have we modeled the risks from non-bank financing effectively? Have we missed a crucial new source of systemic risk? These are all questions that we must ask ourselves. The third issue that I'd like to raise is the problem of too big to fail. That is, the perception by investors in some institute, that perception by investors that some institutions will receive support from their governments if they become distressed. This weakens market discipline and allows such firms to become even larger, more leveraged, and more complex. To address this challenge, the FSB and other global standard-setters developed a framework and a set of policy measures intended to reduce the moral hazard risk posed by systemically important financial institutions. These measures are intended to make the financial system more resilient. For example, through higher capital and liquidity requirements, while simultaneously allowing these institutions to fail without causing disruption to critical services such as payments. A key element of the FSB's policy measures to address too big to fail is its total loss-absorbing capacity standard. Under this standard, the FSB introduced a bail-in, in contrast to a bail-out strategy, that necessarily employs a gone concern or post-failure loss-absorbing and recapitalization capacity for the set of globally systemically important banks. Crucially, by raising resolution standards, we've improved the potential for a non-disruptive bank failure of even a very large institution. The implementation of these standards is advanced in the banking sector, especially for the largest globally important banks. The FSB established crisis management groups, collections of supervisors who monitor resolution plans of the firms. At the same time, we must be conscious that we've not actually tested the failure of a large bank in the marketplace, which is certainly a good thing, but leaves some questions unanswered. Standing over a decade from the start of the financial crisis, we must ask ourselves, how effective have we been at reducing the problem of too big to fail? Have we achieved our objective to reduce or eliminate the problem? Have we introduced new unintended risks to the financial system or costs to other financial market participants? To start answering these questions, as part of its broader effort to evaluate the effects of reforms, the FSB is launching an evaluation of the effects of these too big to fail reforms. We intend to bring analytical rigor to these questions, and we recognize that the academic community has undertaken much work in this area. So as a result, we'll draw extensively on academic advisors during all phases of the work we're undertaking. And I also encourage other experts in the field to look closely at the consultative document that will be coming from the study next year, and we welcome their input as we undertake the study of this signature issue from the crisis. Let me conclude by reiterating some of the broad themes I intended to convey today. First, I touched on some of the key principles that I hope will guide the FSB work while I'm chair. These principles include expanded engagement with a broad range of stakeholders and experts, rigorous and careful examination of financial vulnerabilities in a methodical and disciplined way that may threaten our financial system, and analytical examination of past reforms to ensure that they're making the financial system as resilient as it can be in the most efficient manner possible. Second, I shared some of the key questions we're working on relating to the rise of large technology firms in the financial sector and decentralized financial technologies, the growing importance of the non-bank financial sector, and our burgeoning efforts to look at how well we've addressed too big to fail, the signature issue of the recent financial crisis. Moving forward, there will surely be additional issues to address and areas to examine. During my time as chair of the FSB, I hope to make progress not only on the areas I've outlined, but on a range of forward-looking issues and continue to demonstrate the value of this institution. International standard-setting bodies serve an important role within our global financial sector, and I look forward to the FSB advancing our progress and work in these areas. Thank you very much, and I'm looking forward to taking some questions.