My perspective in pursuing these questions is not as overseer, or as policy maker, but as practitioner. Recall that following the designation by the Financial Stability Oversight Council (FSOC) of eight private sector financial market utilities as systemically important in 2012, the Board of Governors, acting in its oversight capacity (and inestimable wisdom! ), committed to hold the wholesale services operated by the Reserve Banks to “as high or higher a standard” as it holds these private sector utilities; I assure you, we are experiencing, appropriately, that “or higher” side of the spectrum. Like our infrastructure peers we are challenged to maintain the integrity of existing operations while contending with a brave new world; constrained by the demands of cost recovery and limited resources; challenged by the multiplicity of risk and compliance frameworks with which to comply and governance and stakeholder bodies to satisfy; conscious that we have to defend across an extended front while our adversary need only find a single point of entry; and keenly aware that we must be perfect every day, our foe successful but once. These are heavy burdens; I speak not to you, but of you. With that context these remarks (I assure) reflect my own views and do not necessarily represent those of the Federal Reserve Bank of New York or the Federal Reserve System.
Let us instead develop a coherent and integrated system that relies upon the classical elements of defense, but none of them exclusively: perimeter security to keep the adversary outside of the environment; defense in depth to safeguard our most critical assets; sophisticated intelligence to understand the adversary’s tactics; robust surveillance to monitor for intrusion and ensure environmental integrity; rapid response to fend off attack; effective collaboration with allies to enhance information sharing and collective security; and a strategic reserve to respond deftly in the event of loss. Make no mistake: as it relates to the wholesale services of the Federal Reserve Banks, we aspire not merely to a commercial standard of resiliency, or even a supervisory standard, but something approaching national security grade. We proceed on this trajectory from a position of strength, reflecting a record of experience that has endured the most severe terror attack in our nation’s history, a financial crisis of historic proportion, and an array of extreme weather events. But in this sphere, either intentionally we are progressing, or inevitably we are regressing: there is no idleness. Thank you for your generous attention today. I’d be pleased to respond to a few questions. 5/5  BIS central bankers' speeches