a single authority could supervise all banks, securities dealers, investment funds, insurance companies, financial conglomerates and portfolio managers. this integrated supervisory authority would also play a key role in the fight against money laundering. b ) fight against money laundering and financial crime i come naturally to the issue which is of major importance for all financial centres today : the fight against money laundering and criminal money. any financial system - and the swiss system is no exception - can be misused in order to transfer or recycle money issued from, or linked to illegal activities, including terrorism, drug trafficking, illicit trades in weapons, modern slavery, and corruption, just to name a few. to be sure, a money laundering risk already existed in the past. as a result of globalisation, however, and of the growing significance of organised crime, the risk has increased considerably in recent years, not just in my country, but in every major financial centre. for this reason, a dense network of legal regulations, controls and self - regulatory mechanisms is necessary in order to make a financial centre as unattractive as possible for criminal funds. switzerland has been one of the first countries to introduce strict anti - money laundering laws. they cover the activities not only of banks, but also of any other financial intermediary such as insurance companies, funds managers, lawyers and even fiduciaries. our experience so far has shown that an efficient fight against financial crime requires two specific rules : first, the application of strict due diligence procedures that includes careful identification of the customers, i. e. of the beneficial owners of the assets involved ; second, the obligation, imposed to the market intermediaries to inform the authorities in case of any founded suspicion of money laundering. i am fully convinced that an effective fight against money laundering can only be successful if an active co - operation between financial institutions and authorities is promoted. in our view, the responsibility of the banker should prevail over an automatic reporting of transactions exceeding a certain amount. tracking down criminal money is even more difficult than identifying money laundering operations. the financing of criminal activities does not require large amounts and the ex ante identity of a criminal is not a source of pertinent information. furthermore, funds used in the financing of terrorism, unlike cases of money laundering, very often are legally acquired. it is therefore crucial that financial intermediaries in both the banking and the non - banking sectors thoroughly verify their client relationships in order to identify suspicious circumstances. in

was becoming a major cause for concern for the financial as well as the real sector, a framework for revitalizing distressed assets in the economy has been implemented with effect from april 1, 2014. the framework lays down guidelines for early recognition of financial distress, information sharing among lenders and co - ordinated steps for prompt resolution and fair recovery for lenders. it envisages centralised reporting and dissemination of information on large credits, early formation of lenders ’ forums and incentives for lenders and borrowers to agree on resolution and disincentives for both in the event of failure to act in a timely way. improvements in the current restructuring process such as an independent evaluation of large value restructuring with a focus on viability and fair sharing of gains and losses between promoters and creditors have been mandated. finally, a more liberal regulatory treatment of distressed asset sales, particularly to asset reconstruction companies, has been provided. it proposes to bring non - bank lenders also under its ambit for enhanced effectiveness. x. the basel committee issued the principles for sound stress testing practices and supervision in may 2009. in tune with these principles, the extant reserve bank guidelines on stress testing have been updated. stress testing which is based on forward looking approach is expected to provide a complementary and independent risk perspective to other risk management tools such as value - at - risk ( var ) and economic capital and complement risk management approaches that are based on complex, quantitative models using backward looking data and estimated statistical relationships. xi. with the objective of building up a buffer of capital which can be used to achieve the broader macro - prudential goal of restricting the banking sector from indiscriminate lending in the periods of excess credit growth that have often been associated with the building up of system - wide risk, the reserve bank has proposed to create a countercyclical capital buffer ( cccb ) framework for banks in india. the proposed draft cccb framework in india is based upon the credit - to - gdp gap in conjunction with other indicators like gross non - performing assets ( gnpa ) growth. the cccb shall increase linearly from 0 to 2. 5 per cent of the risk weighted assets ( rwa ) of the bank based on the position of gap between 3 percentage points and 15 percentage points. xii. the reserve bank is keen to introduce a countercyclical provisioning approach with the objective of building up provisioning buffer for the banking system when the bis central bankers ’ speeches banks in general