Over the period since 2011, we’ve witnessed a number of fundamental changes in the banking sector: The regulatory and supervisory framework has substantially raised requirements and expectations around capital, liquidity and risk management including, for example, more rigorous stress testing and capital surcharges for systemically important firms; The macro/finance environment of sluggish growth and low rates is putting pressure on bank business models. We are now in the eighth year of interest rates near zero in the U.S., which has hurt bank profits and affected risk-taking and business model choices. Ongoing technological innovations have altered both the opportunities and the threats facing financial institutions. Marketplace lending, distributed ledger, and robo-advisers promise great opportunity, while cyber threats, data privacy issues, and IT-related vendor management issues are legitimate concerns. With that idea in mind, I thought it would be useful to look at the last five years of this Forum’s program in order to identify key themes and common topics. I’d like to discuss three specific issues: systemic risk, governance, and regulatory reform. First, systemic risk has been a central topic of discussion at each Global Risk Forum over the past five years. Given the acute trauma of the financial crisis and its systemic nature, that is not surprising. I did find it interesting to see how the discussions of systemic risk have shifted over these five years. Initially, the discussions were primarily focused on defining systemic risk, including the underlying shocks and propagation channels.
2/3  BIS central bankers' speeches  Conclusion As risk professionals, it’s important to be forward-looking and to continually ask ourselves: are all risks being captured, measured, and monitored? What is missing? Are we focused on the right areas? So, here is another question: When we look back at this conference five years from now, what will we view as a major blind spot? I expect there will be issues that we will be surprised we missed, and part of the purpose of discussions like this is to lower the likelihood and impact of those inevitable blind spots. Thanks for your attention, and I’m looking forward to hearing the discussion throughout the day. 3/3  BIS central bankers' speeches