two new liquidity ratios to mitigate liquidity risk. bis central bankers ’ speeches introduced a new leverage ratio to limit leverage and reinforce risk - based requirements. developed a large - exposures framework to limit the maximum loss in case of counterparty ’ s failure. last, but not least, the basel committee has improved the effectiveness of supervision by upgrading its core principles and by strengthening the supervision of systemically important banks. many of these new rules are now in place and we can say that banks are more resilient now than in 2009. but different weaknesses persist. for this reason, the basel committee is undertaking a review of the capital framework that will be finalised by the end of 2016. in particular, the methodologies used to measure banks ’ risks are being reviewed, both under the standardised approaches and under internal models. the standardised approaches are being revised to incorporate the lessons learned from the crisis so as to increase their risk sensitivity without, however, making them unduly complex. regarding the internal models, they have been criticised because of their lack of comparability, the variability of the resulting risk - weighted assets, and their complexity and lack of transparency. these, let ’ s say, “ faults ” have undermined the credibility of capital ratios. therefore, the basel committee is considering including several constraints on internal models in order to strike a better balance between simplicity, comparability and risk sensitivity. the other remaining major challenge is calibration. basel iii has changed the prudential setting quite significantly. the days when there was a single metric ( the risk - weighted capital ratio ) are over. we now have several prudential measures that will most probably be interacting in different ways. banks will have to comply with a risk - weighted capital ratio ( including additional buffers ) ; a leverage ratio ; two liquidity ratios and the large exposure limits. additionally, banks that apply internal models will most likely face capital floors based on standardised approaches. finally, some systemic banks will have to hold additional capital to meet global - systemically - important - bank ( gsib ) buffer and total - loss - absorbingcapacity ( tlac ) requirements. applying different metrics will make the framework more resilient because some metrics will avoid the limitations of others. for instance, floors based on standardised approaches are meant to be a kind of control or safeguard on internal model risk calculations. therefore, during 2016 the basel committee will be quite busy deciding on the

the correct direction towards achieving regulatory consistency between resolution strategies. let me stress, when mentioning bis central bankers ’ speeches consistency, that it is important that different jurisdictions also strive to achieve this objective when introducing the tlac standard into their regulations. crisis management groups ( cmgs ) will also play a crucial role in ensuring consistency. 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 €4. 5 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