do not have unlimited resources. they need to know as soon as possible the regulatory end point they are working towards. and it is true that some of the regulatory reforms overlap. some address the same issue from different angles. we cannot be sure how they will work together in practice. but remember, neither was the crisis “ coherent ”. it threw up multiple and complex failures and problems that then sparked multiple regulatory responses. and, unfortunately, the financial sector continues to throw up fresh regulatory issues. in this respect, one of the major challenges we now face arises from the welter of conduct issues that have surfaced in recent years. for banks we are now at or very close to the end of the design stage for all of the major reforms. the end points are increasingly clear. in many areas we are well into the implementation stage. for non - banks we are further behind. but the direction is clear. and the international regulatory community needs to keep its eye on how the key moving parts work together. we must be alive to the risks of unintended consequences. indeed, given the breadth of the reforms and the complexity of the financial system, i would be surprised if everything worked exactly as we intended it to. there may well be cases in which we need to adapt standards and rules in the light of experience. there may be others in which there are indeed impacts that had not been foreseen but the reforms remain justified in terms of financial stability. bis central bankers ’ speeches so we will need to be very alive to “ coherence ” as implementation progresses. given the need to agree standards between a large number of countries with very different financial institutions, we are unlikely to achieve perfection. but if we can achieve good, robust and consistently implemented and applied international standards, we will have made the system much much safer. this need for “ consistent application ” brings me on to the much harder condition for success – the “ condition of mutual trust ”. we have a globally integrated financial sector. but we have national – and i should note in europe ’ s case, regional – regulation and supervision that answers to national parliaments and, when it goes wrong, drags in national taxpayers. internationally we can only agree standards. we cannot implement them in international law, in international regulations. that can only be done by national legislators in national law. nor, when we have implemented the rules, do we have international supervisors to apply them to international firms. we have only national supervisors, answerable to national

if it all goes wrong the losses are “ socialised ” then history teaches us that this is exactly what they will do. iii. what has been achieved? so, in these four key areas, what has been achieved? the inputs have certainly been impressive. from a standing start in 2009 the financial stability board has driven the regulatory reform programme. under the fsb, around 25 groups have been set up to run around 15 major workstreams. adding in the related work of the international standard setters – the basel committee on banking supervision, the international organization of securities commissions, the international association of insurance supervisors, we are talking about literally hundreds of meetings over the past five years, attended by hundreds of experts across a wide range of fields. but only bureaucrats – and possibly international airlines and hotels – are interested in inputs like the number of international meetings … what about the outputs? the outputs have been impressive. most so, is the international agreement on a new capital and liquidity framework for banks. the so called basel iii capital standard for banks was finalised in 2011. banks have already begun the transition to the higher standards that will be fully in force by 2019. bis central bankers ’ speeches and the fsb has begun to take steps towards establishing a global capital standard for systemically important insurers. alongside capital, the first ever international liquidity standard for banks was agreed at the beginning of this year. it is part of a new liquidity framework that will be finalised by the end of the year. we now also have an agreed definition for an international standard covering bank leverage – the so - called “ leverage ratio ” – the final standard is due to be set in 2017 after trial running. to critics, the speed of progress on liquidity and capital – key areas of weakness in the crisis – may seem painstakingly slow. but i would make three points in response : first, i would contrast the time taken to agree basel iii and much of the rest of the framework – around 3 years between the start and finish of negotiations – with the best part of 10 years it took to agree its badly flawed predecessor, basel ii. second, in the light of the transition to the new standards banks in many jurisdictions have already strengthened their capital positions – often it has to be said with some prodding from the supervisors. in the uk, banks are holding £150bn more capital than prior to the crisis. globally, there is around $ 500bn more capital in the world ’