new minimum standards to enhance banks ’ liquidity buffers is well advanced, but needs some remodelling before completion. the current definition of highquality liquid assets is too narrow, focusing only on sovereign debt and cash. this may have the unintended consequence of increasing segmentation and reducing liquidity in some financial markets. consideration should be given to broadening the definition to allow for a continuum of asset types, with suitable haircuts and limits. systemically important financial institutions with additional protections for global sifis agreed, work is now under way to extend extra resiliency requirements to banks that are not globally systemic but are systemic at the national or domestic level. this includes developing an appropriate methodology for identifying domestic sifis, and outlining prudential measures to mitigate the risks they pose. bis central bankers ’ speeches given the significant differences across countries in the structure of national banking systems, this framework should adopt a principles - based approach so that regulators have the flexibility to focus on the additional requirements that will be most effective within their domestic context. the systemic risks posed by other types of financial institutions and financial infrastructures are also being reviewed. the international association of insurance supervisors ( iais ) is developing a methodology to identify activities of insurance companies that are systemically important on a global scale, including both traditional insurance and ancillary activities. once the nature of their systemic activities has been identified, consideration will need to be given to any additional buffers that may be required – a task made more difficult by the lack of an international prudential accord for insurance companies. the committee on payment and settlement systems ( cpss ) and the international organization of securities commissions ( iosco ) are currently developing safety and soundness principles for financial market infrastructures, such as central counterparties ( ccps ). work is also under way to examine the systemic activities of other types of non - bank financial firms or so - called shadow banks. shadow banking drawing the systemic elements of shadow banking into the regulatory net was a central element of the g - 20 leaders ’ reform vision. they agreed that regulation and oversight should depend on the nature of the activity – not legal structure – and that like activities should receive like treatment. in many countries, including canada, market - based financing or shadow banking is at least as large as the traditional banking sector. shadow banking spans a range of activities, including repurchase agreements, mortgage - backed securities, other types of securitization, short

, demographics and productivity trends were more favourable than they are today. in the past, we deleveraged during times of strong global growth. in the past, our exchange rate acted as a valuable shock absorber, helping to smooth the rebuilding of competitiveness that can only sustainably be attained through productivity growth. today, our demographics have turned, our productivity growth has slowed and the world is undergoing a competitive deleveraging. we might appear to prosper for a while by consuming beyond our means. markets may let us do so for longer than we should. but if we yield to this temptation, eventually we, too, will face painful adjustments. it is better to rebalance now from a position of strength ; to build the competitiveness and prosperity worthy of our nation. bis central bankers ’ speeches