to be consistent with the countries ’ long - term debt sustainability. further work on a debt sustainability framework would also facilitate our discussion about what is needed beyond the present hipc initiative. the decision to extend the initiative for two more years was a welcome move in order to ensure equal treatment of eligible countries. however, there is a need to consider new ways of addressing long - term growth and sustainability issues in both hipc as well as in other low - income countries.

erkki liikanen : on the structural reforms of banking after the crisis speech by mr erkki liikanen, governor of the bank of finland and chairman of the highlevel expert group on reforming the structure of the eu banking sector, at the centre for european policy studies, brussels, 23 october 2012. * * * changes in banking in the run - up to the crisis the new landscape in the years preceding the global financial crisis that started in 2007, the landscape of banking had gone through major changes. global financial institutions had grown ever bigger in size and scope and their organizational complexity had increased, adding to their opacity. they had become strongly interconnected via increasingly long chains of claims as well as correlated risk exposures, arising from increasingly similar investment strategies. their leverage had strongly increased and the average maturity of their own funding had shortened. driving forces behind these trends were forces that intensified competition in banking ; technological development and deregulation. advances in information technology as well as in investment theory and practice meant that commercial banks faced increasing competition both on their liability side and asset side. 1 new savings alternatives to bank deposits, such as money market mutual funds, proliferated and new opportunities for borrowing, in addition to bank loans, emerged. in fact, an entire shadow banking sector developed, comprising a chain of non - bank institutions which were able to provide similar financial intermediary services as traditional banks. in this environment, deregulation was partly a response to this and allowed banks to cope with the increasing pressure from non - bank competitors. in the us, the gradual unwinding and the ultimate repeal of the glass - steagall act in the late 1990s made it possible to reunite investment banking and commercial banking which had been separated since the crisis of the 1930s. 2 in europe, the universal banking model already had a longer history of combining commercial banking and investment banking under the same roof. however, there was a trend before the crisis, among the biggest european banking institutions, to strengthen their focus on investment banking, including trading operations, and to increase wholesale funding to the point of excess. part of this trend was driven by the growing demand by non - financial firms for risk management services. with more freedom to choose their business models, banks sought for economies of scale and scope and strived to take advantage of diversification benefits from multiple sources of income. commercial banking moved increasingly away from customer relationship - based banking where loans are granted and then held until maturity to the “ originate