iii is fully implemented in 2019, regulatory capital requirements will be significantly higher and tougher than under basel ii, and i am sure that the financial system will be more stable than before. but are higher capital and liquidity requirements enough? 2. 1 some missions almost accomplished … certainly not. and therefore, besides the basel iii regime, many other regulatory projects have been tackled in response to the financial crisis. let me mention three of the most bis central bankers ’ speeches current ones : regulation to solve the “ too - big - to - fail ” problem, regulation of sovereign exposures and efforts in regulating the shadow banking system. we all know that one problem of the crisis was that banks were perceived as being “ too - bigto - fail ”. the consequence was the perception that whenever a “ too - big - to - fail ” bank runs into trouble, the government might be compelled to bail it out in order to prevent a financial crisis. this means that these banks were implicitly insured – contrary to all market - based economic principles. so, the decisive point is that banks must be able to fail without dragging the entire financial system down with them. what we need, therefore, are effective resolution mechanisms for banks. and the regulators are working on that problem. at the global level, the g20 have just agreed to a proposal that global systemically important banks will have to fulfil in future regarding their capital structure. in particular, these banks will need to ensure a minimum amount of total loss - absorbing capacity, tlac for short, which may be as high as 20 % including the minimum capital requirements and the g - sib buffer. this will make global banks more resilient, and it will allow for their orderly resolution. work on tlac is making good progress. last november, the fsb published a consultative document on tlac. at the moment, impact assessment studies are being conducted in order to gauge the effect of tlac on global systemically important banks. i am quite optimistic that we can finalise the requirements by the end of 2015. it goes without saying that the final rule must not be less stringent than what the g20 leaders agreed upon in brisbane. we need a binding international minimum standard of at least 16 – 20 % of risk - weighted assets. at the same time, the financial stability board ( fsb ) is working on requirements for crossborder resolution. when this framework, consisting of tlac and cross

##g ’ s real estate management and decisions relating to large real estate investments. the gpfg is a long - term and responsible owner. our work on responsible investment is an integral part of the investment process. as of this year, the council on ethics issues recommendations on company exclusion directly to norges bank. norges bank ’ s executive board will on the basis of these recommendations assess exclusion against other tools in the exercise of ownership. the aim is to establish a unified chain of tools. climate change has been among the focus areas of management since 2006. our work on financial risk as a result of climate change is incorporated in the investment strategy and the financial objectives of the gpfg. the ministry of finance is now working to introduce a new behavioural criterion for companies ’ climate emissions in the guidelines for observation and exclusion. such a criterion must then be managed in line with the highest defined threshold for exclusion. bis central bankers ’ speeches it is important that the overriding principle for norges bank ’ s investment management continues to be that the gpfg is a responsible investor with a financial objective. if the gpfg is increasingly used as an instrument for pursuing objectives other than financial ones, it may reduce the clarity of the gpfg ’ s role as a financial investor. if the gpfg investment scope is subject to considerable restrictions, it may entail increased risk or lower returns. the management of the gpfg has been successful to date. the total return since the establishment of the gpfg amounts to more than nok 2 500 billion, or about 40 percent of gpfg capital. through its management, norges bank will continue to promote its overriding objective : to safeguard the fund ’ s assets over time. thank you for your attention. bis central bankers ’ speeches