With increased international mobility of talent, the global war for talent will intensify. Successful financial institutions will be those that are able to develop, attract and  BIS Review 146/2010  7  retain talent. Financial services professionals also need to be regionally oriented and able to integrate cross-border businesses effectively. The blueprint will also address this issue to ensure that the sector will be well supported. In charting the future for the industry, the foundation for financial stability will be strengthened. The focus will be on addressing systemic risks and strengthening crisis management capability. Regulatory cooperation will be enhanced in surveillance and in capacity building for effective cross border resolution of problem institutions. Domestically, significant supervisory attention will be directed towards achieving regulatory consistency in respect to risk assessment for financial groups taking into account the trade-offs and the need for safeguards. Underpinning the more competitive and dynamic financial sector will also be a deep-seated core value system, with financial service providers operating responsibly, with integrity and offering financial products and services with dignity. More specific institutional arrangements will be considered for market conduct and consumer protection. In realizing this shared vision for the financial sector, of critical importance is the cumulative participation of the public sector and the industry in the development of the Plan and its implementation. This combined effort will ensure that the new blueprint is comprehensive, relevant and realistic.

In this endeavour, an appropriate balance will be maintained between our priority to substantially strengthen the capacity of the banking system to absorb future shocks arising from financial and economic stresses, and avoiding material competitive distortions that can arise from uncoordinated moves between countries on specific elements of the framework. Through the continued rigor of our stress testing requirements, the expectations are for banks and insurers to operate at levels that remain sound even under stressed conditions. This will be further reinforced with the implementation of Pillar 2 from 2011, which will accord greater focus on the individual banks’ own internal capital adequacy assessment processes to determine the adequacy of capital against their specific risk profiles and capital management strategies. With respect to liquidity, our existing Liquidity Framework will be enhanced in 2011 to bring it in line with the Basel III standard, while making appropriate customisations to take into account the specific structural characteristics of our market. We will also issue additional guidance to promote more stable funding structures that will increase the robustness of bank liquidity positions, particularly during periods of stress in funding markets. These quantitative liquidity standards will be further complemented by principles for sound and effective management of liquidity risk. While major agreement has been reached on most areas concerning capital and liquidity, proposals in other areas including the non-risk-based leverage ratio, countercyclical capital buffers and the supervision of systemically important financial institutions continue to be a work in progress at the Basel Committee.