can agree and implement key common minimum standards. that impulse to work together, internationally, to provide stronger governance of the global financial sector will inevitably wane somewhat the further in time we get from the crisis in which this was born. i don ’ t think the more powerful, more comprehensive international machinery that has been built since the crisis will disappear. but the challenges will change. it will need increasingly to pivot from design of new international standards to ensuring consistent implementation across jurisdictions. it will need to be prepared to speak out loudly when standards are not being met. where standards have been met, it will need to encourage national authorities in one jurisdiction to recognise and defer to equivalent regulation and supervision in another. and it will need to monitor and address risk throughout the system. of course, while i think and hope we can continue and indeed reinforce the international governance that has been developed, it is not a given that we will succeed. it is very much in everyone ’ s interest to ensure that we do. if we cannot ensure consistent application of international standards, the result is very unlikely to be more unconstrained global financial activity of the sort we saw before the crisis. rather it is likely to be the further rolling back of financial globalisation to the detriment of the global economy as national regulators feel compelled take local action to protect their own jurisdictions. bis central bankers ’ speeches intensive supervision it is not all about new approaches to regulation – to how you set the rules. it is also about new approaches to supervision – to how you apply those rules, day to day. from the outset, a key element of the international reform agenda has been more intense and more internationally co - ordinated supervision of systemically important firms. unlike macro - prudential policy, micro - prudential supervision – the supervision of individual financial firms – is not at all new. but it has changed materially. i recall quite clearly from my time at the treasury, in charge of financial regulation in the early years of this century, the underlying belief among the regulatory and supervisory authorities that the management and boards of firms had an even stronger reason than the supervisor to control risk and the safety and soundness of their firm – and that they had the capacity and capability to do so. the crisis revealed a very different picture in many institutions worldwide. we have learned from this experience. in the uk, the prudential regulation authority ’ s new and more intensive supervisory approach reflects this. there is also a much

corresponds to just over 4 per cent. this does mean that the major swedish banks now meet the future leverage ratio requirement of 3 per cent that i mentioned earlier. however, they all have some way left to reach the leverage ratio requirement of 5 per cent that the riksbank has recommended finansinspektionen to introduce. how can a floor for risk - weighted assets change the capital requirements? the change now being discussed and which will have the greatest impact on the swedish banks ’ capital requirements is probably the introduction of a floor for riskweighted assets ( often called a capital floor ). to understand how this may affect the major banks ’ future capital requirements, we need to know that more than half of the sek 510 billion in cet 1 capital requirement that i mentioned earlier is comprised of so - called special national requirements. this means that finansinspektionen itself or 8 in consultation with other swedish and international authorities has determined that the swedish banks must meet these requirements. this part is thus the specific national swedish requirement over and above the requirements the basel committee has agreed on. an example of these specific national requirements is the risk - weight floor for swedish mortgages that finansinspektionen introduced a few years ago. the capital requirements for major swedish banks in the form of systemic risk buffers that the riksbank, the swedish ministry of finance and finansinspektionen agreed on in november 2011 are also part of these special national requirements. the other part, slightly less than half of the current cet 1 capital requirement, is the internationally - agreed minimum requirement from the basel committee. figure 2. sweden ’ s special requirements need to be reviewed source : sveriges riksbank without saying anything about what a future floor for risk - weighted assets may look like, i will simply assume in my example that no bank ’ s risk - weighted assets may be less than 75 per cent of what they would have been if the basel committee's standardised methods had been used. i would like to point out that this 75 per cent should not be seen as an indication of any future calibration of a floor for riskweighted assets. i have chosen this figure because 75 per cent lies between the 60 and 90 per cent that the basel committee mentioned in its consultation document in march 2016. 4 given this assumption, our most recent calculations indicate that the major banks ’ aggregated risk - weighted assets would increase from the current sek 2