Any attempt to short-cut this process and build up ad hoc measures for purely prudential purposes will not succeed. It runs the risk of adding significant distortions and having unwanted consequences. In particular, if not carefully drafted, the leverage ratio could create incentives for banks to pile up riskier assets in their balance sheets, in order to maintain the same returns on equity with lower leverage. This would only aggravate the problems that regulation is trying to solve and precipitate the next crisis. This is why some scepticism is warranted as to the possibility of using the leverage ratio as a universally binding, or in the language of regulators, a "pillar one" component of the capital framework. Consistency with macroeconomic policy Regulatory reform has today to be implemented in a very uncertain macroeconomic environment. It is therefore important that we strike the right balance: efforts towards long term reform must not create, in the short run, additional downside risks to economic activity. Since Pittsburgh, we have a roadmap and we have deadlines. We must find the optimal sequencing to reconcile our ultimate objectives with the need not to impede the recovery. This is especially relevant for the capital regime. Banks must have a much stronger capital base in the long run. But, in the short run, we expect credit to continue flowing to the economy and we want, therefore, to avoid any abrupt and disorderly deleveraging. We don't want, in short, the introduction of a new capital regime to have a procyclical effect on our economies.

How can the Joint Member Staffs and private stakeholders best collaborate to ensure stability in the Treasury market as the market structure evolves and new technologies are applied? How should practices and culture evolve accordingly? Will new technology and automation in the marketplace introduce unexpected challenges or risks to Treasury market participants? Are there opportunities to improve market transparency in a way that sheds light on risk issues that emerge as the market continues to evolve? Are the regulatory requirements imposed upon the Treasury market appropriate in the current environment? Has a competitive level playing field 2/3  BIS central bankers' speeches  been maintained given the evolving structure? And, are there any changes that could improve the functioning, efficiency and/or integrity of the Treasury market? As I highlighted before, answering such questions well could require greater transparency. It is important for officials and market participants to fully understand the range of market elements. These include the relative size of transaction volumes by various players, the breadth and resiliency of platforms used to facilitate risk transfer, and the robustness of market infrastructure under contingent circumstances. More broadly, interagency efforts and collaboration with the public to shed light on the evolving structure and its risks are critical to protecting Treasury market function and supporting investor confidence. Because we benefit from the Treasury market being the deepest and most liquid market for government securities, complacency should not be an option.