for otc derivatives. this step would complement the higher capital requirement for non - centrally cleared otc derivatives regulation issued in september 2016. 14. transforming shadow banking into resilient market - based finance. compared to other elements of the reform, internationally - wide implementation of the agreed reforms related to shadow banking remains at relative early stage. the fsb and jurisdictions are planning to conduct more work to assess and respond to potential financial stability risk in this area. 15. with regards to monitoring and regulation of non - bank financial entities ( nbfes ), the indonesian fsa is responsible to supervise these institutions. it also has the authority to pass regulations on new and existing nbfes activities. bank indonesia also performs periodic assessments of emerging non - bank financial intermediary activities from a macroprudential perspective. efforts to reduce gaps between the risk assessment framework for nbfes and the banking system are on - going. ladies and gentlemen, 16. implementation of the reforms is challenging. of importance, is ensuring that the implementation of the regulatory reforms does not impair the ongoing economic recovery process and that resilience of the banking system is preserved. 4 of 6 17. we noted several challenges need to be address. first, with regards to bcbs review of the regulatory treatment of sovereign risk. we underline the need to undertake due consideration on the important role of sovereign debt in monetary operation, the financial market and economic development financing, especially in emerging economies. a one - size - fits - all approach may not be suitable due to different sovereign instrument and financial market characteristics among regions. 18. second, revision on the standardized approach for credit risk and market risk. bcbs is working on revising the standardized approaches for credit risk and has revised the framework for market risk to enhance robustness and risk sensitivity of both framework. consequently, the standardized approach will be more granular and complex. on the other hand, indonesian banks mostly engage in traditional banking activities. hence, regulators and the industry will need to adjust their skills and information system accordingly. 19. last but not least, as a number of regulatory reforms are finalized, member jurisdictions including indonesia are expected to implement these reforms expeditiously according to the commited time line. given limited resources, authorities will need to strengthen coordination to ensure full and timely implementation. ladies and gentlemen, 20. i have no doubt the 12th asia - pacific high level meeting on banking supervision will be fruitful as we have an excellent line of speakers,

, given the increasingly cross - sectoral nature of many of today's financial stability issues – such as digitalisation and climate – i believe that more cooperation across different sectors – for example, on accounting, competition, anti - money laundering, data privacy, and taxation, to name a few issues – is also vital. in many instances, we are all working on similar issues from a slightly different angle, and so we would surely all benefit from sharing notes and ensuring that there are no unintended gaps or overlaps. let me end by noting that cooperation need not mean full harmonisation. while having a single, uniform " global rule book " may be theoretically appealing, the fact is that we live in a heterogeneous world, with structural and cyclical differences across banking systems and jurisdictions. moreover, many of our central bank and supervisory authority members are accountable to their national legislatures, so it is crucial that global standard setting bodies are perceived to be legitimate and transparent. this is why the basel committee has an extensive outreach programme with a wide range of stakeholders that go beyond market participants, to include academics, public sector bodies, legislatures and civil society. indeed, there needs to be an appropriate balance between globally - agreed decisions and national measures. this is the approach that has always been pursued by the basel committee. it comprises : ( i ) a common and consistent global baseline of standards and principles to provide a level - playing field ; ( ii ) the ability of member jurisdictions to apply additional and more prudent measures to help mitigate specific areas of risks and vulnerabilities related to their banking systems ; and ( iii ) the possibility for them to implement the proportionality principle in their domestic regulatory and supervisory frameworks, in such a way that neither financial stability nor the safety of financial institutions is undermined. 3 / 3 bis - central bankers'speeches