It should also be noted that the New York Fed’s long experience as the FOMC’s selected bank for 4/8  BIS central bankers' speeches  open market operations on behalf of the Federal Reserve System confers on it a trusted level of competence, experience, and reliability with foreign official account holders. The same New York Fed front office personnel that purchase and sell Treasuries for the Federal Reserve’s own portfolio also execute trades on behalf of foreign official account holders. Moreover, the same New York Fed personnel that perform back office operations for the Federal Reserve’s own portfolio also perform back office operations for the transactions of foreign official account holders. This consolidated transactional platform used by both the Federal Reserve and its foreign official account holders means that the global official community can be assured that the quality of the services it receives from the Federal Reserve meets the same standards as the Federal Reserve sets for the servicing of its own portfolio. Choreographers of central bank operations Let me now spend a moment discussing the people behind our account services. In doing so, I wish to recognize staff past and present who have played and continue to play a vital role every day in processing critical transactions on behalf of the global official community. Your experience in the daily management of the accounts of other central banks produces unique operational knowledge and expertise.
For financial institutions, while cyber threats may have been regarded as a cost of doing business at one point, it is not an exaggeration to say that they are now viewed as potential existential threats, not just for individual firms but also for the broader financial system and critical infrastructures that support it. As central banks with broad mandates for financial stability, this is certainly a concern for us all. We recognize the challenges and complexities in strengthening prevention, detection, and incident response regimes around fraudulent payment instructions. Users of financial messaging services such as SWIFT span the full range of IT sophistication and capacity, and remediating deficiencies in prevention and detection may require a substantial re-orientation of priorities and resources for some institutions. Overcoming these obstacles will be no easy task, but so long as there is a weak link in the cybersecurity chain criminals will seek to exploit it. As we face the common challenges of strengthening our cybersecurity defenses and payment controls, the need for cooperation is greater now than ever. The Federal Reserve stands ready to engage in further dialogue and cooperation with both its foreign official accountholders and fellow central bank service providers in addressing these challenges. 5/8  BIS central bankers' speeches  Conclusion In doing so, we as a community can ensure that the provision of account services among central banks continues to bear the hallmarks of safety, confidentiality, and reliability which are essential to the execution of our public mandates.