use regulations impact the availability of low - cost housing? how would novel approaches to housing development increase supply and longevity of affordable units? should practitioners consider more comprehensive programs that include workforce development and financial literacy to help renters and their families achieve economic stability? access to stable, affordable housing is critical for economic well - being, and it provides an important foundation for an individual to fully participate in the economy. i hope that today's discussion is valuable for all our panelists and participants. i am excited that we are able to facilitate an ongoing dialogue among this distinguished group of researchers and practitioners to share information and discuss policy challenges related to affordable rental housing. 2 / 3 bis - central bankers'speeches i hope that these conversations can lead to identifying evidence - based solutions to meet the demand for affordable housing that is so crucial in maintaining vibrant communities. thank you for joining us. 3 / 3 bis - central bankers'speeches

not grow wider. indeed, an important function of supervisors is to act as something of a clearinghouse for best practices. if the supervisor perceives a deficiency in practice, it is his responsibility to engage the bank manager in a discussion as to whether the shortcoming really exists and, if so, how to fix it. i will conclude by reiterating the three points i made at the beginning. first, there is a strong and dynamic thread running between regulation and market innovation. while the basle accord of 1988 was entirely appropriate to its time and circumstances, it is now clearly in danger of becoming outmoded by the pace of financial innovation. conversely, the regulation has contributed to some market innovations that appear to be driven, if not solely, at least primarily by the need to engage in regulatory capital arbitrage. second, the reality of globalization must be accounted for in designing and implementing our regulatory and supervisory systems. especially among developed nations, we cannot afford a growing disparity in the quality of risk practices at our important institutions, nor a disparity in the quality of supervision of those institutions. as bankers like to say, the worst competitor is an uninformed competitor - - and that goes doubly for the competitor ’ s supervisor. third, given that financial markets are constantly evolving, this means that our regulatory framework must also continually evolve. the international capital standard has not changed in basic form for almost a decade - - it is still a ratio - based rule. while it may still be adequate for the vast bulk of banking institutions, it clearly is inadequate for the world ’ s most complex banks. for these institutions, high capital ratios do not necessarily equate with low insolvency probabilities. thus, the ratio - based standard is inefficient in achieving the supervisors ’ objective of limiting bank failure to acceptable levels. worse, it may be fostering other inefficiencies in the banking system, to the extent the capital standard encourages regulatory arbitrage that entails significant transaction costs. in the absence of any viable alternatives, it is my view that we should begin now to plan for a models - based successor to the accord. inevitably, this will take a tremendous effort, given the complexity of the subject and the differences across institutions and between countries. moreover, a models - based system of capital regulation would require a degree of cooperation among supervisors, quite apart from having similar written rules, that is unprecedented. but i believe the