Therefore, coordination between the different national authorities participating in these CMGs will be relevant in the application of TLAC. Some examples of these key decisions are: (1) determining adjustments for Multiple Point of Entry groups regarding the location of deductions and requirements; (2) identifying material subsidiaries and resolution entities; and (3) discussions as to whether the minimum TLAC is sufficient to ensure orderly resolution or whether additional firm-specific requirements are needed. TLAC is quite a demanding new standard. The estimated increase in issuances of TLAC debt is not negligible, if we consider the impact assessment performed by the Financial Stability Board and the Basel Committee: the aggregate shortfall for G-SIBs under the low calibration represents 16.9 % of the € trillion G-SIBs unsecured debt market. Compliance will be facilitated by the agreed phase-in for TLAC and the replacement of unsecured liabilities maturing in coming years which will be an important source of TLAC eligible instruments. However, the success of both the roll-over and the issuance of new TLAC-eligible instruments will depend on the absorption capacity of financial markets. In any event, we should monitor compliance with the requirements and any potential unintended impact during the transition period. 4. The plan to address misconduct risks  With the publication of the TLAC term sheet, the Financial Stability Board has virtually completed its work to address the too-big-to-fail problem in the banking sector. But there are other important areas where the FSB is working to fulfil the G20 mandate.

In particular, the Financial Stability Board has claimed that the problems of misconduct in some financial institutions have the potential to create systemic risks, considering the scale of the associated fines and sanctions which could run into the millions and also the negative impact on confidence. This is a serious threat that must be properly addressed. The banking business is about trust; if confidence in the financial institutions and markets is lost, the potential for finance to serve the real economy and foster growth will be undermined. In response to this threat, a new area of FSB-coordinated work has been set up. An action plan has been launched which, among other measures, explores the pivotal role played by compensation structures and, more generally, corporate governance frameworks in preventing and mitigating bad practice. The FSB is examining whether the reforms already in place, mainly as a result of principles and standards issued by the OECD, the Basel Committee and the FSB itself, have proven effective or if, on the contrary, more preventive measures are required. 5. Closing remarks  Let me conclude. Back in 2009 the FSB and other standard-setting bodies (such as the Basel Committee) received a mandate from the G20 to restore the resilience of the financial markets and make future financial crises less frequent and costly. Most of the agreed postcrisis measures are now in place and have already begun to deliver benefits in terms of bank resilience and financial stability. The Basel Committee intends to finalise the Basel III framework in 2016.