The head and the staff should be protected against frivolous law suits, as long as they conduct supervision in good faith. Traditionally, independence has been best protected when supervision is conducted in an NCB since the NCB itself is independent due to its role in monetary policy. The NCB also has its own revenues and budget. Outside the NCB, independence must be ensured through explicit legislation and through clear rules for obtaining the necessary resources, e.g. by levying fees on the supervised entities. Contrary to supervision located in the central banks, the supervisory sections which are entities of Ministries are by definition not operationally independent and their resources are dependent on budget appropriations. The second condition for good supervision is accountability. The authority must regularly provide information about its performance in various forms, such as Parliamentary hearings, speeches by the management, written reports and websites. On these occasions the authority describes and explains its actions and stands ready to receive criticism. There is no specific structure of supervisory authorities that automatically leads to better accountability so clear rules must be set regardless of how the authority is structured. The third condition is transparency. The general public and in particular the supervised entities need to have full information about regulation and supervision. The authority must consult with interested parties to ensure that efficient laws and regulations are drafted and after implementation they should cooperate with the market participants and others to ensure that the rules are well understood and implemented.
Simon Potter: The Foreign Exchange Global Code - lessons learned and next steps Remarks by Mr Simon M Potter, Executive Vice President of the Markets Group of the Federal Reserve Bank of New York, at the 2017 FX Week Conference, New York City, 12 July 2017. * * * I would like to thank Christina Getz and Jamie Pfeifer for their excellent assistance in the preparation of these remarks and colleagues in the global central bank and FX community for numerous insightful comments and suggestions. Good morning. It is a pleasure to return to FX Week USA, and I would like to thank FX Week for the invitation. Foreign exchange (FX) market participants play important roles in their interactions with the New York Fed. They act as FX trading counterparties of the New York Fed and they provide information on market conditions to support the Desk’s monitoring of financial markets and transmission of policy. I am pleased to have the opportunity to speak with you today. Before I begin, I would also like to note that my comments today reflect my own views and not necessarily those of the Federal Reserve Bank of New York or the Federal Reserve System. However, remarks on the expectations for FX counterparties reflect the policies of the Federal Reserve Bank of New York. At this event two years ago, I highlighted the important role the FX market plays in facilitating the flow of capital across the globe in support of international trade and investment.