of its application, the framework is thus not restricted to a specific sector. furthermore, it can be applied to banks which are systemically important internationally as well to banks that are not systemically important at the global level but at the domestic level. this means that the sifi framework takes account not only of interlinkages across sectors but also of the close connection between national and supranational levels. in designing the new basel framework, basel iii, the close interlinkages in the financial system – between sectors as well as between jurisdictions – have to be taken into account in order to prevent regulatory arbitrage. this is because the new capital and liquidity standards for banks will not only lead to an increase in the quality and quantity of capital and an improvement in liquidity. at the same time, these more stringent regulations will potentially set incentives to shift transactions and thus circumvent the stricter banking regulation. i am thinking in this context not only of shifts into less strictly regulated jurisdictions but also, in particular, of transactions being shifted towards less strictly regulated players of the shadow banking system. these examples also show clearly that we have already passed a number of important milestones in financial market regulation, but are still a long way from our destination. progress in work on the various elements of the reform agenda is at different stages. some reforms have already taken the form of planned legislation or have already entered into force ; others will follow this year. even so, we still have a lot to do. besides solving the “ too big to fail ” problem, developing comprehensive recommendations on the regulation of the shadow banking system is among the upcoming major projects this year. here, i expect the publication of our final report in september. the future viability of the business models of a number of banks will also be subjected to scrutiny – not least against the backdrop of the ongoing discussion about the introduction of a model involving a separation of commercial and investment banking, or the volcker rule. bis central bankers ’ speeches and then we also still have a lot of work to do on the regulation of otc derivatives trading. the g20 ’ s original time schedule for implementing the recommendations on the reform of the otc derivatives markets by the end of last year failed to be met. it is therefore all the more important not to ease off at this point but to press on resolutely with its implementation. delays in the timetable cannot always be avoided. but they should not lead to the envis

##aged reforms being watered down. otherwise, we would be jeopardising our goal of making the financial system as a whole more resilient to crises. 4. consistent implementation taking centre stage although we still have a fair stretch of road ahead of us, the focus is rapidly moving away from the development of regulatory measures towards implementing them. in the future, monitoring their implementation will undoubtedly be shifting more and more to centre stage. the reason for this is that, if the regulatory measures agreed at international level are to have their intended effect, it will be absolutely crucial for them to be implemented consistently in the individual countries as well. that also includes adhering, as far as possible, to the timelines agreed for their implementation so that competitive distortions are avoided as far as possible. to prevent the emergence of a regulatory gap, the regulations should be applied not only in the g20 countries but also, preferably, in all countries with developed financial systems. regulators and supervisors are aware of the importance of consistent national implementation. for that reason, we have significantly expanded our work in monitoring national implementation over the past few years. thus, the self - commitment of the fsb members to lead by example in the implementation of international standards is subject to a regular review with publication of the results. in addition, for three years now, a system of peer reviews has been in place among fsb members to investigate the relationship between promise and performance or, in other words, how far the internationally agreed standards and principles have been implemented nationally. in cooperation with international standard - setting bodies, in october 2011 the fsb presented a coordinated framework for monitoring and reporting on the implementation of the agreed reforms. in this connection, greater attention is being paid to areas such as the basel framework and measures relating to sifis, but also including the shadow banking system. in - depth monitoring and regular publication in the form of progress reports to the g20 are also helping to keep up the pressure for implementation. in order to prevent regulatory arbitrage between sectors and countries, we have to fix our sights even more firmly on the systemic aspects of regulation. the key requirement for doing this is to assess the overall effects of the regulatory measures and to analyse any potential interactions between them. impact studies play a major part in gauging the macroeconomic effects of new proposed regulation. i therefore expressly welcome the fact that all the basel reforms – including the new basel iii liquidity standards – are being accompanied by studies that assess