current account transactions, were settled in rmb. the use of rmb for direct investments has also seen an encouraging start, amounting to some rmb 90 billion yuan for inward direct investments and rmb 20 billion yuan for outward direct investments in 2011. as for portfolio investments, some 40 offshore institutions have been allowed to invest in the interbank bond market, within varying quotas. meanwhile, some rmb 20 billion yuan have been invested in the stock market through the rmb qualified foreign institutional investor ( qfii ) scheme. as of course you know, over this period of liberalisation, a rapidly growing offshore rmb market has also emerged, centred in hong kong. the rising level of rmb trade flows to and from the mainland has produced an expanding pool of rmb liquidity. and the growing liquidity in the offshore rmb market has led to the development of rmb financing and forex markets, with an estimated daily turnover of around 2 to 4 billion us dollars for spot and forward transactions. i will come back to the development of hong kong as the offshore rmb business centre later. so, we are seeing a trend that rmb is increasingly used in mainland china ’ s external trade, followed by direct investments and portfolio investments. the offshore rmb market is growing with increasing breath and depth, serving the useful function of the intermediation of rmb funds. and these developments are bringing tremendous business opportunities, which corporations and financial institutions cannot ignore. bis central bankers ’ speeches what next? now, it ’ s worth emphasising that this has all taken place only since 2009. so, they are very much just first steps and we should expect further developments in the future. if we look ahead a little, what might we see? well, given what we ’ ve seen in terms of economic growth and liberalisation of policy, it would not be at all surprising to see the proportion of trade being conducted in rmb continue to rise in years ahead. longer term, many ask about the possibility of the rmb playing a more equal role alongside the dollar and the euro. on this, i would point out that the more widespread use of rmb has been a progressive and market - driven process, and i expect this to continue. i believe that, whilst liberalisation is important, the rmb becoming an international currency to a large extent is not a matter of policy alone – it is also subject to market forces. in other words, it would come from non -

if they outweigh the positive effects of any financial regulations. when designing global financial regulation and supervision, the following four - step cycle must be repeated : first, designing systems from a forward - looking perspective ; second, steady implementation ; third, evaluation of the positive effects and negative side effects, taking into account new technologies and changes in financial environment ; and fourth, addressing any problems when necessary, such as when the negative side effects exceed the positive effects. ten years have passed since the review of global financial regulations and supervision began in earnest after the global financial crisis. in what follows, i will first assess the regulatory development work done during this period, particularly at the financial stability board ( fsb ) and the basel committee. then, among the work currently underway, i would like to highlight the importance of work on the evaluation of financial regulations. finally, i will mention climate - related risk as one of the challenges for future financial stability. 1 / 4 bis central bankers'speeches ii. past achievements : evaluation of discussions over the last 10 years after the global financial crisis, work on reforming financial regulations started with a review of past crises, including the causes of each crisis. it revealed that before each financial crisis, there had always been a build - up of debt at financial institutions and in the non - financial sectors — socalled leverage build - up. financial regulations were therefore strengthened in a forward - looking manner. for example, attention was focused on the credit - to - gdp ratio, which has implications as a leading indicator of potential problems. there has been much valuable progress in international financial regulation and supervision over the past 10 years, including basel iii. for example, an expansion of the basel iii framework was made in each of its three pillars : the first pillar being minimum requirement ; the second pillar, supervisory review process ; and the third pillar, market discipline through disclosure. in terms of content, policy tools such as liquidity regulations were expanded, in addition to the previous riskbased capital regulation. also important was the introduction of a macroprudential perspective at the international level. specifically, first, a countercyclical capital buffer ( ccyb ) was introduced in response to the issue of procyclicality over time ; and second, the structural issue of the “ too - bigto - fail ” problem has been addressed by the introduction of a new framework for identifying global systemically important banks ( g - sibs ) and a total loss - absorbing capacity ( t