Richard Dzina: Advancing the Fed's wholesale services in an era of unprecedented challenge and change Remarks by Mr Richard Dzina, Executive Vice President of the Financial Services Group of the Federal Reserve Bank of New York, at the Securities Industry and Financial Markets Association's Operations Conference and Exhibition 2017, Boca Raton, Florida, 9 May 2017. * * * Thank you and good morning. In leading the Federal Reserve’s wholesale services I am continually reminded that my stewardship responsibilities for this extraordinary business run in at least three directions. Organizationally, I am accountable to principals across the Federal Reserve System and to the Directors of the Federal Reserve Bank of New York. Managerially, I am accountable to the men and women who make this business function, as capable and as dedicated a cadre of public servants as has served our nation anytime, anywhere. Operationally, and the sensation I feel most keenly standing before this audience of industry leaders, I am accountable to our depository institution customers, and their end users, which rely upon our services to send and receive time critical payments; to transfer, maintain, and provide safekeeping for Fedwire-eligible securities; and to settle positions derived from transactions in other markets. I’d like to thank SIFMA for the opportunity to participate in today’s program, and for the visceral reminder of accountability that comes with this invitation. I have long maintained that the Federal Reserve’s wholesale services represent the franchise when it comes to our nation’s financial market infrastructure.
There are areas where we are likely to have erred in being too prescriptive and others where we left too much room for discretion and judgment. It would be good if we could find a way to build into the initial design of guidance and regulation the capacity for quicker and continuous evolution as we learn more. Second, we need to continue to adapt our approach to the imperatives of a much more integrated global financial system. Global integration, of course, gives us all a greater stake in the quality of supervision outside our borders. This pragmatic interest will lead us to spend progressively more resources and attention on the international dimension of our work. This recognition informed the efforts that led to the Basel Capital Accord, the Lamfalussy Standards for payment and settlement systems and many other international cooperative efforts. But the imperative is much stronger today because of the much greater extent of financial integration, and it is only likely to grow. It is also important that the design of regulatory initiatives in the United States be informed by a careful assessment of their relative impact on U.S. institutions and markets. Effective solutions to many of the concerns we face in our national financial systems will require multilateral approaches.