At the same time, we recognize that it’s not just individual business lines or firms that are affected, but regulatory changes are having an impact on markets as well. We, collectively, need to spend more time identifying and understanding these impacts as well – and we need to work across jurisdictions to do that. Conclusion In conclusion – we all have a lot to do! First, though, firms need to focus on fixing what was so completely broken – firms were too complicated, MIS was weak, risk management was poor, compliance programs were ineffective and governance was questionable. Once that hard work is on track – and substantially in place – we need to engage in a productive two-way dialogue about the challenges that firms are facing. As I said earlier, rhetoric is fine (and I understand much of this), but without specifics, it’s difficult to know whether the outcomes were intended or not. Yes, we did intend for you to be less complicated and complex; yes, given the weaknesses, we did intend for capital and liquidity to provide assurances to home and host supervisors; and, yes, we do want to know more about your senior management and expect much more interaction with them. 6  BIS central bankers’ speeches  At times, our outcomes may appear to be in conflict: we want smooth efficient markets that support global growth AND we want a strong, resilient, safe financial system. Our challenge is how to balance those.
I think we’ve been clear in our expectations around AML/BSA: •  That AML/BSA needs to be managed on an enterprise-wide basis;  •  That AML/BSA needs to be a high priority for the board of directors, senior management and line management;  •  That the message on compliance needs to be carried down well into the organization, so that those who are on the front lines making daily decisions understand the importance of compliance and the consequences for failing to meet the requirements; and  •  That AML/BSA shouldn’t be treated as a static exercise – standards and best practices evolve and you are required to keep up with and adhere to the latest requirements. As I know you are also aware, we are seeing keen competition for talent/resources in this area. While we recognize that it may be difficult to identify and retain talent, having a solid recruiting strategy and ongoing training in place, as I mentioned earlier, are important components to addressing the problem. You might wonder why this topic remains on my list – and it’s because in spite of the heavy public attention on the matter, including a range of public enforcement actions, it remains a work in progress for many firms. And, for firms that haven’t yet been faced with MRAs or a public enforcement action, I worry about complacency. So, I raise it again because it seems that another warning shot is warranted. 2.