over the long run. let me elaborate on our reform programme, which is nearing its final stage of completion. my focus will be on strengthening the global capital framework and introducing a global standard for liquidity. ii. capital reform quality of capital base i will start with capital since raising the level, quality, consistency and transparency of the capital base is one of the committee ’ s primary objectives. it is only through higher levels of loss absorbing capital that the banking sector will be in a stronger position to shield the economy from future shocks. the thrust of our work is to improve the level and proportion of the core elements of tier 1 capital, namely common equity and retained earnings. under the existing standard, banks could hold as little as 2 % of risk - weighted assets as common equity. it is even less if you consider the need for additional regulatory adjustments. this situation is unacceptable and must change. at its meeting on july 26th, the basel committee ’ s governing body – the group of central bank governors and heads of supervision – reached broad agreement on a fundamental strengthening of the definition of capital, with a focus on the core elements of capital instead of debt - like substitutes that are of questionable quality. moreover, virtually all deductions from capital will now occur at the level of common equity, instead of tier 1 capital, as has been the case under the current standard. this will ensure that banks cannot show strong capital ratios and, at the same time, recognise assets that diminish the quality of capital. let me be clear : the change to the definition of capital represents – by itself – a substantial strengthening of the global capital regime. this is the case before we even begin to discuss an increase in the level of minimum capital requirements or the introduction of buffers. capturing all the risks in addition to raising the quality of the capital base, we need to ensure that all risks are captured. during the crisis, we learned that many risks were not covered in the risk - based regime. in particular, these include the complex, illiquid credit products which found their way into banks ’ trading books without a commensurate increase in capital to support the risks. the committee has since strengthened substantially the rules that govern capital requirements for trading book exposures as well as for complex securitisations and exposures to off - balance sheet vehicles. the revised trading book framework, on average, requires banks to hold around three to four times the old capital requirements. controlling leverage an additional and – as recent

the risks and opportunities related to sustainability, it is less clear how it should go about this. usually, the first thing companies want is a strategy. now, if we want to combat climate change, if we want a sustainable economy. wouldn ’ t it be wonderful if individual companies ’ strategies would somehow be aligned with a much broader world strategy? wouldn ’ t it be wonderful if such a strategy for the world existed? if we are all in the pursuit of happiness, if all men are created equal, not just those of us living today, but all men and women that will come after us, shouldn ’ t we urgently formulate a strategy for the world? fortunately, the world does already has such a strategy : the sustainable development goals of the united nations. and, keeping that in mind, a suggestion i would give to companies is : innovate, while using what ’ s already there. join a platform, cooperate, form strategic alliances ; get an overview of what ’ s happening ; connect with others. today is a great example of just that. for example, the netherlands banking association has recently launched a public consultation document proposing how the dutch banking sector can support a number of the un sustainable development goals. businesses could follow suit by launching a similar initiative. we cooperate on this matter as well : the dutch central bank is part of the g20 green finance study group and of the european high level expert group on sustainable finance. this expert group is mandated by the european commission to come up by the end of this year with nothing less than a comprehensive strategy to turn eu financial regulation green. it will publish its interim report by means of public consultation by the end of next month. if you want to directly influence eu green finance strategy and policy please don ’ t hesitate to send in your comments. using our convening power on a national level, the dutch central bank created a national cross - sectoral platform for sustainable finance, bringing together representatives from all over the financial sector as well as the relevant ministeries, and stimulating the creation of working groups that take on a range of sustainable finance issues. one of these working groups works on sdg impact measurement and consists of a several dutch insurers, pension funds and banks together with major multinationals such as philips and unilever. their goal is to develop a methodology that will allow them to assess the impact on the sdgs of any investments they make. if investors around the world start doing this on a large scale, you can